Washington DC Online Casino Bill Would Tax iGaming at 25%

Washington, D.C. is weighing legislation that would legalize real-money online casino gaming in the District while simultaneously prohibiting sweepstakes casinos — a dual approach that has become the defining template for US iGaming policy in 2026.

The proposed Internet Gaming and Consumer Protection Act of 2026 would tax online gaming revenue at 25 percent and give licensing preference to sportsbook operators already licensed in the District, including FanDuel, DraftKings and BetMGM. If enacted, D.C. would join a small group of US jurisdictions with fully regulated online casino gaming.

What the Bill Proposes

The core provisions cover three areas:

• Legalization of online casino gaming — slots, table games and live dealer products offered by licensed operators to players physically located in the District.
• A 25 percent tax on gross gaming revenue — positioning D.C. in the middle of the national range, well below Pennsylvania's slot rate and above New Jersey's headline figure.
• A prohibition on sweepstakes casinos — targeting dual-currency models that offer casino-style play outside the regulated licensing framework.

The preference for existing sports betting licensees is notable. Rather than opening a broad competitive process, the bill would channel iGaming licenses toward operators the District already regulates, shortening the path to launch and simplifying oversight.

Why 25 Percent Matters

Tax rate is the variable that determines whether a regulated market attracts serious operator investment. Set it too low and the jurisdiction leaves revenue on the table. Set it too high and operators either decline to enter or cut marketing and promotional spend so aggressively that players stay on offshore sites.

At 25 percent, D.C. would sit in a range that has historically supported competitive markets. For context, several European jurisdictions raised iGaming taxes sharply in 2025 and 2026, and operators responded by trimming bonus budgets and, in some cases, exiting entirely. Policymakers in the US have watched those outcomes closely.

The Sweepstakes Ban Is the National Story

The sweepstakes provision places D.C. alongside a rapidly growing list of states restricting dual-currency gaming. Legislative action against sweepstakes casinos accelerated sharply through the first half of 2026.

Indiana's HB 1052, effective July 1, 2026, bans online sweepstakes gaming that uses a dual-currency or multi-currency payment system to simulate lottery or casino-style games. The law also empowers the Indiana Gaming Commission to levy civil penalties of up to $100,000 against operators or individuals conducting such games over the internet.

Several other states have enacted or proposed similar measures, and the pattern is consistent: jurisdictions moving toward regulated iGaming are closing the sweepstakes channel at the same time. The logic is straightforward — a regulated, taxed market cannot compete with an untaxed parallel one offering similar products.

What It Would Mean for D.C. Players

If the bill passes, District residents and visitors would gain access to licensed online casino products with the consumer protections that accompany regulation: independently tested game fairness, mandatory responsible gambling tools, segregated player funds, and a regulator to appeal to when disputes arise.

They would also lose access to sweepstakes platforms currently operating in the District. That trade-off has been contentious elsewhere, with sweepstakes advocates arguing the products serve players in states without regulated iGaming, and regulators countering that dual-currency models evade the tax and consumer-protection obligations licensed operators accept.

For players comparing what regulated options currently look like elsewhere, our guide to the best online casinos covers the licensed landscape state by state.

The Broader 2026 Legislative Picture

D.C.'s proposal is one data point in an unusually active year for US gambling legislation. Multiple states have introduced iGaming bills, several have advanced sweepstakes restrictions, and the federal conversation around prediction markets has added a third front to an already crowded policy agenda.

What distinguishes 2026 from prior years is the pairing. Legislators are increasingly treating iGaming legalization and sweepstakes prohibition as a single package rather than separate questions. That framing helps build coalitions — land-based operators, licensed online operators and state revenue offices all benefit from the combination.

Whether D.C.'s bill advances depends heavily on Council priorities and the District's unique budget process. Similar proposals in other jurisdictions have stalled repeatedly before eventually passing, and there is no guarantee this session produces a result.

What to Watch Next

• Committee action — whether the bill receives a hearing and markup this session.
• Operator positioning — public support or opposition from FanDuel, DraftKings and BetMGM.
• Tax rate amendments — the 25 percent figure is the most likely provision to move during negotiation.
• Sweepstakes industry response — legal challenges have followed similar bans in other jurisdictions.

How D.C. Compares to Neighboring Jurisdictions

Geography makes the District's position unusual. Maryland and Virginia both border D.C. and neither currently offers regulated online casino gaming, though both have seen legislative proposals. A District market would therefore serve a resident population of roughly 700,000 plus a substantial daily commuter and visitor population — but only while those people are physically within District boundaries, verified by geolocation.

That constraint caps the realistic revenue ceiling. Analysts assessing similar small-jurisdiction markets typically model modest annual gross gaming revenue relative to states like Michigan or Pennsylvania. The counterargument is that D.C.'s dense daytime population and heavy tourism traffic could produce higher per-capita engagement than population figures alone suggest.

There is also a competitive dynamic worth noting. If D.C. moves first, it gains a window before Maryland or Virginia act. If either neighbor legalizes shortly afterward, the District's advantage largely disappears — which is one argument supporters have used for moving this session rather than waiting.

Frequently Asked Questions

Is online casino gaming currently legal in Washington, D.C.?

No. The District permits sports betting under an existing licensing framework, but online casino gaming is not yet authorized. The proposed Act would change that.

When would D.C. online casinos launch if the bill passes?

Regulated markets typically take nine to eighteen months from enactment to launch, accounting for rulemaking, licensing and technical certification. No timeline is guaranteed.

What is a sweepstakes casino?

A platform offering casino-style games using a dual-currency system — typically a free play currency and a second currency redeemable for prizes — structured to operate outside conventional gambling licensing.

How does a 25 percent tax rate compare nationally?

It sits in the mid-range for US iGaming. Rates across regulated states vary widely, and the effective burden also depends on how promotional deductions are treated.

Conclusion

The Internet Gaming and Consumer Protection Act of 2026 reflects the direction US gambling policy has taken this year: expand the regulated market, tax it at a workable rate, and close the unlicensed channel at the same time. Whether D.C. becomes the next regulated iGaming jurisdiction now rests with the Council.

Follow the regulatory story as it develops with our latest articles, and explore our full library of gambling guides at DeucesCracked.