The District of Columbia could be the next US market to regulate iGaming platforms, as a lawmaker in the district has introduced the Internet Gaming and Consumer Protection Act.
Council Bill 260656, introduced last Thursday by Councilmember Wendell Felder, seeks to legalise online casinos in the district, while also imposing a ban on online sweepstake casinos – unlicensed gambling operators that use a dual-currency payment system.
The move by DC to ban sweepstakes reflects broader sentiment in the US, seeking to ensure that gambling verticals don’t slip through the cracks of regulation.
When it comes to online sweepstakes casinos, the bill states that violators would be subject to a civil fine of up to $100,000 for each violation, which could rise to $500,000 if the ban is violated multiple times.
DC’s Attorney General would also be able to take legal action against online sweepstakes casinos with ‘restitution and disgorgement’ enforcement actions.
If the iGaming act is passed, the district would join Indiana and Maine as US jurisdictions that have banned online sweepstakes casinos in 2026.
Felder stated in a letter to the DC Council: “Inaction carries real consequences. Without a legal framework, revenue continues to flow to unregulated operators, consumers remain exposed to risk and the district falls behind neighbouring jurisdictions that are moving forward.”
That being said, it hasn’t all been success for states looking to prohibit sweepstakes, with both Mississippi and Maryland falling short in their efforts.
The bureaucratic obstacles that both states endured in pursuing the banning of sweepstakes underpin that there is still work to be done for DC in its effort to eradicate the sweepstakes sector.
iGaming evolution
As the state seeks to regulate iGaming, it has confirmed the market would be regulated by the Office of Lottery and Gaming (OLG), which would be required to impose the bill’s tax revenue structure and licensing requirements, issuing operator and supplier licences to those who meet the criteria.
Interested parties would have to pay a $2m application fee for an initial five-year term operator licence, with renewal fees costing $500,000. The number of licences that could be issued has not been capped.
Anyone aged 21 or over will be allowed to wager on an iGaming platform, while a 25% tax rate will apply to operators on their adjusted gaming revenue. The act will also allow for any reported negative gaming revenue by operators to be carried over to the next month.
Felder said: “This bill reflects 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 from Felder, approximately $700m was wagered by DC residents with unlicensed and offshore operators in 2024, as the lawmaker called for the district to follow other US states that have regulated iGaming, including Michigan, New Jersey and Pennsylvania.
The Department of Behavioural Health is expected to receive the first $500,000 of tax revenue generated from online casino gaming, supporting ‘prevention, education, treatment, referral and recovery services related to gambling addiction and related behavioural health needs’.
In addition, 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 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 could support critical priorities, including behavioural health services, responsible gaming programs and broader community investments.”
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