Washington DC Proposes New iGaming Legislation to Legalize Online Casinos and Outlaw Sweepstakes Platforms

New DC bill B26-0656 aims to authorize online poker and slots while implementing a total ban on sweepstakes gaming and a 29% effective tax rate.

By: AXL Media

Published: Apr 15, 2026, 11:10 AM EDT

Source: Information for this report was sourced from Gambling Insider

A Strategic Pivot Toward Regulated Digital Gaming

The District of Columbia is moving to formalize its digital gambling landscape through the introduction of the Internet Gaming and Consumer Protection Act of 2026. Introduced by Councilmember Wendell Felder on April 9, the legislation aims to transition players from offshore and unlicensed platforms into a regulated domestic market. Current estimates suggest that District residents wagered approximately 700 million dollars on unregulated sites in 2024, representing a significant loss in potential tax revenue and local economic activity. By authorizing legal internet gaming, the District intends to implement oversight through the Office of Lottery and Gaming, ensuring that these existing activities contribute to the local treasury.

Strict Financial Requirements for Market Entry

The proposed framework establishes high barriers to entry designed to attract established, well capitalized operators. Companies seeking a five year license must pay a 2 million dollar application fee, with renewals set at 500,000 dollars. Furthermore, operators will be subject to a monthly tax of 25 percent on adjusted gross gaming revenue, supplemented by a 2 percent regulatory assessment and a 2 percent community impact assessment. This resulting 29 percent effective tax rate positions the District as a high yield jurisdiction for local government. To streamline the process, the bill allows for expedited reviews for firms that already hold sports betting licenses in Washington, giving major players a significant logistical advantage.

Local Economic Mandates and Small Business Inclusion

Beyond direct tax revenue, the legislation includes a notable social equity component through Certified Business Enterprise requirements. Licensed operators must ensure that at least 35 percent of their local operating budget is allocated to small businesses within the District through various contracts. This mandate is paired with a 50,000 dollar licensing fee for suppliers, including providers of geolocation services, payment processing, and game content. According to the bill’s proponents, these measures are intended to ensure that the expansion of the gaming industry translates into tangible benefits for the District’s broader business community rather than just multinational corporations.