Washington DC Online Gambling Hearing Sparks Sharp Division Among Lawmakers
Washington DC online gambling legalization faced intense scrutiny during a recent council hearing that exposed sharp divisions between problem gambling advocates and major gaming operators. Representatives from multiple problem and responsible gambling organizations testified that real-money online casino gaming would disproportionately harm city residents least able to afford losses. However, operators argued their platforms provide responsible gambling tools unavailable at existing offshore sites. The proposed DC online gambling bill would authorize games such as blackjack, poker, roulette, and slot-style products with a 25% tax on operator revenue. The measure features an open licensing model without operator caps and includes an explicit sweepstakes ban. Indeed, Washington would join eight states with legal real-money iCasinos.
DC Online Gambling Hearing Reveals Sharp Divide Between Advocates and Operators
Council Bill 260656, introduced April 9 by Councilmember Wendell Felder, prompted nearly three hours of testimony from more than a dozen witnesses during a scheduled April 21 hearing before the Committee on Human Services. The session highlighted fundamental disagreements about regulated iGaming’s impact on the District.
Les Bernal, national director of Stop Predatory Gambling, delivered particularly pointed criticism. “This is like putting Dracula in charge of the blood bank,” Bernal stated, arguing that legalization would grant regulated operators greater access to potential targets.
Industry representatives countered with assertions that licensed platforms provide safeguards absent from unregulated offshore operations. Operators emphasized their financial incentive to maintain customers gambling within sustainable limits, contrasting this business model with unmonitored alternatives.
Multiple sweepstakes casino operators appeared during the hearing to oppose the legislation. Their presence underscored concerns about market disruption stemming from the proposed sweepstakes ban.
The Office of Lottery and Gaming, designated as the primary regulatory authority under the bill, backed most key regulatory provisions. However, officials stopped short of offering formal endorsement for or against DC online gambling legalization.
Council members refrained from voting following testimony. The measure requires passage through the full 13-person city council before becoming law.
Proposed Bill Sets 25% Tax and Open Market Licensing Structure
The regulatory framework establishes operators would face a total effective tax rate of 29% on adjusted gross gaming revenue. This breaks down into a 25% primary tax paid monthly to the District Treasurer, alongside a 2% regulatory assessment covering administrative costs and a 2% community impact assessment.
Operators could deduct promotions up to 1.75% of annual AGR starting in year three. The Office of Lottery and Gaming retains authority to approve higher promotional caps during an operator’s first 12 months to support market entry. Monthly losses could be carried forward for up to six months.
Entry costs under the DC online gambling proposal include a $2 million application fee. License renewal stands at $500,000 every five years[25]. Suppliers of game content, geolocation services, payment processing, and random number generators must obtain separate licenses with $50,000 application fees and $25,000 renewal costs every five years[25].
The proposal does not cap the number of operator licenses. Each operator would be limited to two approved gaming brands unless the OLG authorizes additional skins upon demonstrating good cause and public interest[26]. Existing mobile sportsbook operators including BetMGM, Caesars, DraftKings, FanDuel, Fanatics, and theScore Bet would receive expedited licensing timelines[26].
Operators must ensure at least 35% of their DC-related operating budget flows to local Certified Business Enterprises through contracts.
Sweepstakes Ban and Responsible Gaming Measures Face Scrutiny
The legislation targets unregulated sweepstakes platforms through explicit prohibition of dual-currency systems that simulate casino gambling while avoiding traditional oversight. Violators face civil penalties reaching $100,000 per violation, with amounts escalating to $500,000 for repeated or systemic breaches. The Attorney General gains cease-and-desist authority and injunction powers to pursue restitution and disgorgement enforcement actions against operators.
Felder outlined eight mandatory responsible gaming tools operators must provide: deposit limits for daily, weekly, and monthly periods; spend or loss limits across identical timeframes; session or time limits; cooling-off periods of at least 72 hours; self-exclusion and account closing options; real-time or near real-time account history access; periodic reminders of platform time spent; and procedures for third-party exclusion requests when financial responsibility evidence exists.
The bill requires default limits on new accounts and mandates customer-facing staff training on gambling harm prevention. Marketing faces tight controls through clear disclosure requirements, age-targeting restrictions, and promotional incentive limits.
Following passage, the Chief Financial Officer must establish regulatory rules within 90 days, with market launch authorized within 180 days once systems achieve certification readiness. Multiple iGaming operators testified they could activate operations within six months of approval.
