The prospect of a new online casino market in the US doesn’t come around too often, so when two states show iGaming regulation intentions, it’s not surprising that operators are energised.
Caesars Entertainment told its investors during its fourth quarter earnings call this week that it has strong expectations for both Maine and Virginia legalising iGaming.
The operator stated that Maine appears highly likely to launch iGaming, while there has been positive legislative movement in Virginia, with bills passing through the House of Delegates and Senate.
Chief Executive Officer Tom Reeg said: “The fact that we’re still alive at this point in the session is a good sign for brick-and-mortar operators. There are make-well payments as part of the legislation that would benefit us. Our fingers are crossed in Virginia – that would be a very good outcome for us.”
Reeg mentioned on the call that other states could follow Maine and Virginia if budget issues have impacted them, as regulated online casino operations offer a tax revenue stream.
“I get asked to predict what’s the next one to go. I would tell you, in both Maine and now Virginia, weeks before we were in the position that we’re in now, we would have told you we don’t – we’re not particularly optimistic. This stuff can come together very quickly and it’s not necessarily on our radar, or anyone’s radar, who will be next.
“The overarching truth is you’ve got a lot of states that have budget issues that are looking for revenue, in many cases, with new leadership. Virginia has a new governor who’s looking for revenue sources. That can be a good outcome for the casino business.
“I know in the last 18 months, that’s not been a great outcome. We’ve seen taxes on online sports betting move up. We’ve seen per-wager taxes were due for some good news in the political cycle and it looks like there may be some coming.”
Caesars reported Q4 net revenues of $2.9bn, up 4.4% year-over-year (Q4 2024: $2.8bn), while its adjusted EBITDA increased by 2.2% to $901m (Q4 2024: $885m) with a quarterly record $85m in Caesars Digital. The operator expects a strong net revenue and adjusted EBITDA for its digital operations in 2026.
Virginia bills progressing
Both the Senate and the House approved iGaming legislation earlier this week, as SB 118 passed in the Senate by a 19-17 vote, while HB 161 passed in the House by a 67-30 vote.
Both bills are now set to swap chambers, but lawmakers will have to find common ground on the best path forward given the different specifics within each legislation.
If its legislation is signed into law, Virginia would become the ninth US state to legalise iGaming, joining the likes of Connecticut, Delaware, Maine, Michigan, New Jersey, Pennsylvania, Rhode Island and West Virginia.
Under HB 161, a maximum of 15 iGaming platforms could go live in Virginia, as up to three online casino skins each can be launched by the state’s five existing land-based casinos – run by Caesars Entertainment, Rush Street Gaming, Hard Rock International, Boyd Gaming and Cordish Companies’ Live! Casino.
To enter the market, A licensing fee of $500,000 must be paid, as well as a $2m platform fee. Adjusted gross internet gaming revenue will be taxed at 20%, while the market will be regulated by the Virginia Lottery.
An Internet Gaming Hold Harmless Fund will receive 6% of all tax revenue, which would be used to offset any loss of revenue by land-based operators that is attributed to iGaming. Virginia-based live dealer studios would also be established.
Online sweepstakes gaming would be banned through the bill, as any company offering a sweepstakes game would violate the law and be subject to penalties, unless they are licensed as an iGaming operator.
Financial impact
Caesars isn’t the only operator to express optimism about Virginia, as BetMGM also sees the iGaming market’s potential.
BetMGM CEO Adam Greenblatt said during the operator’s investor call earlier this month that Virginia legalising iGaming would be good news. However, its financial impact might not be felt until next year, as the process from legislation to bets being placed can take several months.
Greenblatt said: “It’s Virginia and iGaming states that are the primary upside. As we’re seeing with Alberta, the process of regulating a new market is not trivial. There are lots of considerations. I think there’s been some analysis on this; on average, from law passing to first bet taken is about nine months.
“So I think good news this year would probably only have a financial impact in the real world in 2027. I don’t think 2026 is at risk one way or the other from new states.”
Currently, the earliest it is expected that iGaming will be launched in Virginia is July 2027.
