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(AsiaGameHub) – The District of Columbia could become the next US market to regulate iGaming platforms, following the introduction of the Internet Gaming and Consumer Protection Act by a local lawmaker.
Council Bill 260656, introduced last Thursday by Councilmember Wendell Felder, aims to legalise online casinos within the district, while also enacting a ban on online sweepstakes casinos — unlicensed gambling operators that utilize a dual-currency payment system.
DC’s decision to ban sweepstakes casinos aligns with broader national sentiment across the US, as officials work to ensure gambling sectors do not slip through the gaps in existing regulatory frameworks.
For violations of the sweepstakes casino ban, the bill outlines that offenders will face civil fines of up to $100,000 per incident, with penalties increasing to $500,000 for repeated violations.
DC’s Attorney General will also have the authority to pursue legal action against online sweepstakes casinos using ‘restitution and disgorgement’ enforcement measures.
Should the iGaming act be passed, the district will join Indiana and Maine as US jurisdictions that have banned online sweepstakes casinos in 2026.
Felder noted in a letter to the DC Council: “Inaction carries tangible, real-world consequences. Without a formal legal framework, revenue continues to flow to unregulated operators, consumers remain exposed to potential harm, and the district falls behind neighbouring jurisdictions that are advancing with regulatory efforts.”
That said, not all efforts by US states to prohibit sweepstakes casinos have been successful, with both Mississippi and Maryland falling short of their goals.
The bureaucratic hurdles both states faced when attempting to ban sweepstakes casinos highlight that DC still has significant work ahead if it hopes to eradicate the local sweepstakes sector.
The Evolution of iGaming
As the district seeks to regulate iGaming, it has confirmed the market will be overseen by the Office of Lottery and Gaming (OLG), which will be tasked with implementing the bill’s tax revenue structure and licensing requirements, and issuing operator and supplier licences to eligible applicants.
Interested parties will be required to pay a $2m application fee for an initial five-year term operator licence, with renewal fees set at $500,000. There is no cap on the total number of licences that can be issued.
Individuals aged 21 or older will be permitted to place wagers on iGaming platforms, while a 25% tax rate will apply to operators based on their adjusted gaming revenue. The act will also allow operators to carry over any reported negative gaming revenue to the following month.
Felder commented: “This bill takes a practical, data-informed approach to strengthening consumer protections, modernising our gaming framework and capturing revenue that is currently flowing outside of the district’s oversight.”
According to data shared by Felder, roughly $700m was wagered by DC residents with unlicensed and offshore operators in 2024, with the lawmaker urging the district to follow the lead of other US states that have regulated iGaming, including Michigan, New Jersey and Pennsylvania.
The Department of Behavioural Health is set to receive the first $500,000 of tax revenue generated from online casino gaming, which will support ‘prevention, education, treatment, referral and recovery services related to gambling addiction and related behavioural health needs’.
Additionally, the Department of Insurance, Securities and Banking, the Office of Victim Services and Justice Grants and the Department of Employment Services will each receive 30% of the remaining tax revenue, while the Department of Health will receive 10%.
Felder added: “Initial annual tax revenue could reach tens of millions of dollars, with growth expected as the market matures. These funds can support critical priorities, including behavioural health services, responsible gaming programs and broader community investments.”
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