Washington, D.C. could become one of the few U.S. jurisdictions offering regulated online casino gaming under legislation introduced by Councilmember Wendell Felder. The proposal would authorize internet slots, blackjack, poker, roulette and live-dealer games while prohibiting unlicensed sweepstakes platforms that use dual-currency systems.
The Internet Gaming and Consumer Protection Act of 2026, designated B26-0656, would place the market under the District’s Office of Lottery and Gaming. It proposes a 25% tax on adjusted gross internet gaming revenue, substantial licensing fees and several additional assessments intended to pay for regulation and community programs.
The legislation would also establish detailed requirements for age verification, geolocation, player funds, advertising, account limits and voluntary exclusion. However, it remains a proposal rather than an authorization for operators to begin accepting online casino wagers.
That distinction is essential. The bill offers a detailed vision for regulated iGaming in Washington, but its eventual passage, implementation schedule and final requirements remain uncertain.
B26-0656 Would Create A Regulated Online Casino Market
Councilmember Wendell Felder, who represents Ward 7, sponsored the Internet Gaming and Consumer Protection Act of 2026. The official B26-0656 legislative record identifies the measure under consideration by the Council of the District of Columbia.
The proposal would allow licensed operators to provide casino-style games through websites, mobile applications and other approved internet platforms. Authorized products could include:
- Slots and video poker
- Blackjack, baccarat, craps and roulette
- Live-dealer casino games
- Peer-to-peer games such as online poker
- Other games subsequently approved by the Office of Lottery and Gaming
Participation would be limited to adults aged 21 or older. An operator would need to confirm a customer’s age, identity and physical location before accepting a wager.
Players generally would have to be located within Washington, D.C. The legislation also provides for reciprocal agreements with other eligible jurisdictions, potentially allowing shared poker liquidity or other interstate gaming arrangements where permitted by federal law.
The bill expressly separates internet casinos from the District’s existing lottery, sports wagering and skill-game frameworks. Legalizing iGaming would therefore create a new regulated category rather than simply expanding the definition of mobile sports betting.
Operator Licenses Would Cost $2 Million
B26-0656 does not propose a fixed numerical limit on internet gaming operator licenses. Instead, the Office of Lottery and Gaming would evaluate applicants for financial responsibility, operational ability, regulatory history and the suitability of owners and key employees.
An operator application would cost $2 million. An approved license would remain valid for five years, with each subsequent five-year renewal carrying a $500,000 fee.
Suppliers providing specialized services such as casino software, game content, payment processing, geolocation or identity verification would face a separate licensing process. The proposed supplier application fee is $50,000, followed by a $25,000 fee for each five-year renewal.
Existing D.C. gaming licensees could receive an expedited review if the regulator determines that previous investigations or licensing records remain relevant. That provision could reduce duplicated regulatory work, but it would not give existing sportsbook operators automatic permission to launch online casinos.
Each operator would ordinarily be allowed to offer no more than two approved internet casino brands. The regulator could authorize additional brands when an operator demonstrates sufficient compliance capacity and market need.
The bill would also require operators to submit a Certified Business Enterprise plan. At least 35% of an operator’s District-related iGaming budget would generally need to be contracted through qualifying local businesses, subject to the approval and waiver provisions in the legislation.
The Revenue Structure Extends Beyond A 25% Tax
The headline financial provision is a tax equal to 25% of each operator’s adjusted gross internet gaming revenue. This measurement broadly represents gaming revenue after customer winnings and certain cancelled, voided or refunded wagers are accounted for.
It is not the total amount deposited or wagered by customers. It also should not be interpreted as operator profit because casino companies would still have technology, staffing, marketing, compliance and supplier expenses.
The proposed legislative text contains two additional charges calculated from adjusted gross internet gaming revenue:
| Proposed Payment | Rate Or Amount | Intended Use |
|---|---|---|
| Internet gaming tax | 25% | District revenue and designated behavioral-health funding |
| Regulatory assessment | 2% | Administration, regulation and enforcement |
| Community impact assessment | 2% | Community Reinvestment Fund |
| Operator application | $2 million | Deposited into the District’s General Fund |
| Five-year operator renewal | $500,000 | Deposited into the District’s General Fund |
Although the two assessments are calculated like percentage-based payments, the bill states that they are not part of the 25% gaming tax. Operators would consequently remit the equivalent of 29% of adjusted gaming revenue before accounting for licensing fees and other business expenses.
The first $500,000 in tax revenue would be transferred to the Department of Behavioral Health for gambling-addiction prevention, education, treatment, referrals and recovery services. Remaining tax proceeds, after required allocations, would enter the District’s General Fund.
The separate 2% community impact assessment would finance the proposed iGaming Community Reinvestment Fund. That fund would divide its resources among four areas:
- 30% for debt management, financial counseling, consumer protection and financial literacy
- 30% for victim and survivor services, domestic-violence programs and family stability
- 10% for research into gambling behavior and gambling-related harm
- 30% for youth development and training in artificial intelligence, gaming, coding and software development
This funding structure gives the proposal a broader public-policy scope than a conventional gaming tax. Whether those programs receive meaningful resources would ultimately depend on licensing, market participation and actual operator revenue.
Responsible-Gaming Tools Would Be Mandatory
The bill’s player-protection provisions are more detailed than a general requirement to display a responsible-gambling message.
Each licensed platform would need to offer daily, weekly and monthly deposit limits. Customers would also have access to spending or loss limits, session limits and temporary cooling-off periods lasting at least 72 hours.
Operators would be required to provide real-time or near-real-time account histories covering deposits, withdrawals, wagers, wins, losses and time spent on the platform. Periodic notifications would show customers how long they had been playing and their net financial activity during the session.
A request to reduce a player-selected limit would have to take effect no later than the customer’s next login. Increasing a limit would require a cooling-off period established by the regulator, preventing a customer from immediately removing a restriction during play.
The Office of Lottery and Gaming would also establish a voluntary exclusion program or incorporate internet casinos into an existing exclusion system. Operators would need to stop direct marketing to excluded customers and protect the confidentiality of information used to administer the program.
New accounts would receive default deposit and loss limits. Customers could modify those limits after acknowledging responsible-gaming information.
These provisions are potentially significant because a control is only useful when customers can find, understand and activate it. The regulator would still need to establish technical standards governing how tools appear, how quickly changes take effect and whether account restrictions carry across affiliated casino and sportsbook products.
Marketing And Promotional Credits Would Face Restrictions
B26-0656 would require online casino advertising to be truthful and not misleading to a reasonable consumer. Promotions could not intentionally target people under 21 or other prohibited customers.
Advertisements would need to include responsible-gaming information and directions to support resources. Bonus offers and promotional credits would have to disclose material restrictions, wagering requirements, expiration periods and withdrawal conditions clearly.
The proposal also limits how operators could deduct promotional credits when calculating adjusted gaming revenue. The bill would not permit routine deductions during the initial period after licensing. Beginning in the third year, allowable deductions generally would be capped at 1.75% of annual adjusted gross internet gaming revenue, although a temporary higher limit could be approved to support market entry.
Restricting promotional deductions could protect the District’s tax base. It may also affect how aggressively operators use bonuses to acquire customers because most promotional costs would not reduce their taxable revenue.
The practical effect would depend on regulations and competitive conditions. A market with several licensees could still produce substantial promotional spending even without favorable tax treatment, while a less competitive market might rely more heavily on established sportsbook databases and shared account systems.
Player Funds And Account Data Would Receive Specific Protections
The proposal would require operators to maintain sufficient reserves for customer balances, unpaid winnings and outstanding wagering liabilities. The Office of Lottery and Gaming could impose a minimum reserve of $500,000 or require a larger amount based on an operator’s exposure.
Customer funds would have to be held in trust, placed in segregated accounts or protected through another regulator-approved method. This is intended to separate player balances from the money used for ordinary business operations.
Payment controls would need to identify whether a funding method belongs to or is lawfully authorized by the registered customer. Accounts could be suspended when an operator detects identity discrepancies, unauthorized third-party funding, fraud, proxy wagering or other prohibited conduct.
Cybersecurity requirements could include multifactor authentication, encryption, access controls, incident-response plans, vendor supervision and independent testing. Operators would also need to retain transaction, geolocation and account records for at least three years.
A shared wallet covering sports betting and online casino gaming could be permitted, but only if the regulator determines that liabilities, taxes and customer protections can be distinguished across the two products.
Shared wallets can make deposits and withdrawals more convenient. They can also complicate how customers understand spending across different forms of gambling, making unified histories and limit controls particularly important.
The Sweepstakes Ban Targets Dual-Currency Casino Models
The other major component of B26-0656 is its prohibition on unlicensed sweepstakes gaming and dual-currency casino products.
These platforms commonly use one type of virtual currency for entertainment and another that can potentially be redeemed for cash or prizes. Operators often characterize the model as promotional sweepstakes rather than conventional gambling.
The D.C. proposal defines a dual-currency gaming product broadly. It covers platforms using two or more currencies, credits, tokens, points or similar units when at least one can be redeemed, converted, transferred or indirectly used for cash, prizes or equivalent value.
Unless specifically authorized under District law, a person could not offer or promote a product that simulates casino games, sports wagering or lottery-style gaming when customers provide direct or indirect consideration for an opportunity to win something of value.
That approach focuses on the economic operation of the product instead of the terminology used by its operator. Purchasing tokens, subscriptions, entries or access could qualify as consideration when the purchase forms part of a customer’s ability to participate or continue playing.
The enforcement provisions would allow the Office of Lottery and Gaming to issue cease-and-desist orders and pursue court injunctions. Licensed companies could face fines of up to $100,000 for individual violations or $500,000 for violations connected to the same transaction, occurrence, pattern or practice.
The D.C. attorney general could also seek restitution, penalties, disgorgement and other civil remedies. Each day of prohibited activity could count as a separate violation.
This proposed enforcement model relates to the wider contraction examined in gclubgod.com’s report on why VGW closed LuckyLand Slots across North America. Sweepstakes operators face increasing pressure as states adopt definitions and penalties specifically designed for dual-currency casino products.
Legalization And Prohibition Form One Policy Strategy
Combining regulated iGaming with a sweepstakes ban is a deliberate feature of the proposal.
A ban by itself could reduce access to certain dual-currency products without creating a licensed alternative. Online casino legalization alone could establish a regulated market while leaving operators competing against platforms that do not pay the same taxes or comply with equivalent licensing standards.
B26-0656 attempts to address both sides simultaneously. Licensed operators would gain access to the District in exchange for taxes, local-business commitments, technical oversight and player-protection obligations. Unlicensed sweepstakes platforms would face explicit prohibition and substantial enforcement powers.
Felder argues that District residents already access online casino-style products through unregulated or offshore services. The proposal’s central policy claim is that regulation would move some of that activity into a supervised system while capturing revenue currently outside District oversight.
That outcome is not guaranteed. Customers do not automatically migrate from unregulated services to licensed platforms, and market revenue depends on operator participation, tax costs, product availability and enforcement effectiveness.
The District would also need adequate staff and technical resources. Regulating games, payments, cybersecurity, geolocation, advertising, complaints and responsible-gaming systems requires more than granting licenses and collecting taxes.
Revenue Projections Require Cautious Treatment
Felder has said a mature online casino market could generate tens of millions of dollars in annual tax revenue. Recent reporting on the D.C. iGaming proposal has highlighted that estimate alongside the bill’s licensing and community-funding provisions.
However, the legislation does not guarantee a particular revenue result. Washington has a smaller population than established iGaming states such as New Jersey, Michigan and Pennsylvania, and revenue comparisons must account for differences in population, tax rates, operator numbers and neighboring markets.
The 25% tax, 2% regulatory assessment and 2% community assessment create a substantial combined obligation. That could produce meaningful public revenue for every dollar of adjusted gaming revenue, but it could also influence how many operators apply and how much they invest in promotions or product development.
The $2 million application charge represents another barrier to entry. Large national operators may be able to absorb that expense, while smaller platforms could decide that the potential market is not large enough to justify the cost.
Licensing fees provide upfront revenue, but they are not recurring market performance. Sustainable projections should distinguish application payments from monthly gaming taxes and separately account for the cost of regulation.
The Bill Still Faces Legislative And Implementation Tests
B26-0656 provides an unusually detailed framework for an initial online casino proposal, but it has not yet legalized internet gaming in Washington, D.C.
Council consideration could change tax rates, fees, eligible games, enforcement powers or revenue allocations. The measure would also require approval through the District’s legislative process before implementation could begin.
If enacted, the chief financial officer would have 90 days to issue proposed or emergency rules and 30 days to create an application process. Online casino gaming could not start until the necessary regulatory, technical and integrity systems were certified as operational.
The most important test is therefore not whether the proposal promises new revenue. It is whether Washington can build a market in which licensing, enforcement and player controls work together.
The bill’s sweepstakes prohibition would have limited value if unlicensed platforms continued serving District customers without meaningful enforcement. Similarly, responsible-gaming requirements would offer little protection if limits, account histories and exclusion tools were difficult to use.
Washington’s proposal recognizes those connections. Its next challenge is converting a comprehensive legislative design into enforceable rules, properly funded oversight and measurable consumer protection.
