New Bill in Washington DC Proposes Legalizing iGaming and Banning Sweepstakes Casinos

(AsiaGameHub) –   A new piece of legislation in Washington DC seeks to regulate the online casino sector. This bill would make iGaming legal and ban sweepstakes casinos, which currently operate via a legal loophole.

“iGaming—online casino-type games like blackjack, poker, roulette, and slot-style games played on mobile phones or computers—is already available to District residents through unregulated and offshore platforms,” stated Wendell Felder, the bill’s sponsor, upon introducing the legislation.

The bill is intended to manage the market, safeguard players, generate tax income, and crack down on illegal operators.

Felder serves as Chair of the Subcommittee on Local Business Development. The legislation has been referred to the Committee on Human Services, with a public hearing set for next month.

Bill Seeks to Provide Consumer Protections

“Without a legal structure in place, these platforms function without adequate consumer safeguards, age verification, or regulatory supervision—posing risks to residents and limiting the District’s ability to respond,” Felder further noted.

Should the bill pass, Washington DC would become the ninth U.S. jurisdiction to formally allow residents to play online casino games. Maine became the eighth state earlier this year when Gov. Janet Mills signed related legislation in January, though the tribal-exclusive framework is being challenged by the state’s commercial casinos.

Felder’s bill would not only legalize online casinos but also prohibit unlicensed platforms, including sweepstakes casinos.

The bill’s text defines sweepstakes gaming as “a game, promotional contest, or scheme, whether offered online or in person, in which an individual provides money, consideration, or something of value (directly or indirectly) for the chance to participate in a casino-style game, a simulated casino-style game, a sports wagering-like game, or a lottery-like game and win a prize or its equivalent, including via a dual-currency gaming product.”

In Maine, legislators passed a separate bill banning these platforms shortly after approving the iGaming law. Maine is the second state (after Indiana) to prohibit sweepstakes casinos this year, following several states that enacted anti-operator legislation last year.

Provisions for Legal iGaming

Under the legislation, each sports betting operator in Washington DC would be entitled to launch two branded online casino platforms.

Platforms would pay $2 million for a five-year license. Operators would then pay an additional $500,000 for each five-year renewal.

DC initially launched sports betting via the Office of Lottery and Gaming’s (OLG) proprietary platform, GambetDC. FanDuel took over as the primary operator in 2024, before other commercial firms launched their services the same year.

Currently, alongside FanDuel, DraftKings, BetMGM, Fanatics, and Caesars Sportsbook are operational. All these companies are likely eager to launch online casino platforms, which are a key revenue driver.

Legal iGaming to Generate Significant Tax Revenue

The bill sets a 25% tax rate on gross gaming revenue. Based on comparable markets, Felder claims this will generate “substantial new tax revenue.”

“Initial annual tax revenue could reach tens of millions of dollars, with growth expected as the market matures,” said Felder. “These funds could support critical priorities, including behavioral health services, responsible gaming programs, and broader community investments.”

From the collected tax revenue, the first $500,000 would go toward problem gambling treatment. The remaining funds would cover the OLG’s operational costs, with the rest allocated to the district’s General Fund.

Notably, the bill does not distribute a percentage of revenue to the OLG—only stating that its costs will be covered.

Arizona has recently come under scrutiny as the state’s Department of Gaming receives a percentage of tribal gaming revenue. This may create a conflict of interest, which could be a key factor in the regulator’s aggressive legal pursuit of prediction markets. It is in the regulator’s interest to protect existing operators rather than enforce regulations.

Felder stressed that in DC, the legal market would be properly controlled, reducing risks for users already using unlicensed platforms.

“Inaction carries real consequences,” wrote Felder. “Without a legal framework, revenue continues to flow to unregulated operators, consumers remain exposed to risk, and the District falls behind neighboring jurisdictions that are moving forward. By advancing this legislation, we can bring an existing market into a regulated environment that prioritizes safety, accountability, and public benefit.”