Virginia’s iCasino Bills Repeat Michigan’s Mistake — And Leave Revenue On The Table

While it’s encouraging to see Virginia push forward with attempting to legalize online casino gaming, the vehicle as it stands today will create a market structure that leaves a lot of money on the table — for the state, in-state casinos, and online operators. This results directly from the borrowing of restrictive branding language contained in Michigan’s Internet Gaming Act.

Both the House and Senate are considering bills that would allow each of the commonwealth’s five licensed brick-and-mortar casinos to obtain an internet gaming operator license, opening the door to regulated iCasino, a process that may require passage of the bills again in 2027 to effectuate them. 

The bills would also implement some notable restrictions around branding/brands used. As I wrote last year regarding the importance of multi-brand strategies in online casino legislation, brand flexibility is a critical component of maximizing taxable revenue in any regulated market. Virginia’s proposed framework, while a positive step, risks repeating a structural limitation that has narrowed the potential of Michigan’s market.

What the bills say

Both leading versions of the Virginia legislation follow the same general structure. Each internet gaming operator (the five Virginia casinos) license grants the ability to offer internet gaming platforms, mobile and web, either directly or through a licensed internet gaming platform provider (i.e., DraftKings, Caesars Interactive). 

Each licensee may contract with up to three internet gaming platform providers, and the regulatory body may allow an operator to partner with a fourth if that partner is a qualified entertainment company, a defined term in the bills designed to promote participation from Virginia-based companies meeting certain DEI and other requirements.

Here is where the problem lies: “Each internet gaming platform shall be offered under a single distinct brand, except that each platform may use a second distinct brand to offer poker.”

The relevant text from both the House and Senate versions reads as follows:

D. Except as provided in subsection E, an internet gaming operator may offer up to three internet gaming platforms, either directly or through a licensed internet gaming platform provider. An internet gaming operator may contract with up to three internet gaming platform providers to operate the internet gaming platforms on its behalf. Each internet gaming platform shall be offered under a single distinct brand, except that each internet gaming platform may use a second distinct brand to offer poker.

E. The Board shall allow an internet gaming operator to offer a fourth internet gaming platform if, and only if, such internet gaming platform provider contracts with a qualified entertainment company to operate the internet gaming platform.

The language in subsection D generally mirrors Michigan’s iCasino law. Subsection E, which addresses the fourth platform opportunity tied to Virginia-based companies, does not exist in Michigan, but is not the focus of this discussion.

It is also worth noting that both bills include language that would effectively outlaw sweepstakes-based online casino platforms. Sites like Chumba and Wow Vegas have likely built sizable player databases in Virginia and could consider a pivot to the regulated market if it makes economic sense. These provisions would shut them out of the sweepstakes market in Virginia, but would not necessarily shut the door to them if they decide to enter the regulated market. In effect, it would be necessary for these operators to make a deal with a Virginia casino to gain market entry, thus taking up another one of the 15 possible access points

What this means in practice

Setting aside the fourth-platform opportunity for Virginia-based companies, the practical implications are straightforward: A Virginia physical casino will have to use two of its three partnership slots if an online operator wants to offer more than one brand for non-poker casino games. 

For operators like DraftKings and Caesars Interactive, this means entering into separate agreements with Virginia physical casinos for each brand of non-poker games they choose to offer. Michigan provides a useful case study. DraftKings currently offers both Golden Nugget and DraftKings Sportsbook & Casino in the state, which requires partnerships with two separate in-state casinos. Caesars operates Caesars Palace and Horseshoe as distinct online casino brands, and offers casino games within its sportsbook app — arguably a third brand, though the Michigan Gaming Control Board has permitted this arrangement to date.

The issues at stake

By codifying that each brand requires a separate partnership with an in-state casino, the Virginia framework creates revenue and competitive consequences for multiple stakeholders.

For in-state casinos, the math is punishing. If a physical casino must allocate two of its three platform agreements to a single operator running two brands — think Caesars Interactive or DraftKings — that casino has fewer access points available to negotiate with additional operators. Fewer negotiating partners means less leverage and, ultimately, less revenue.

For operators seeking to offer multiple brands, each additional brand requires a separate market-access agreement, increasing costs and consuming access points that might otherwise go to new entrants. This dynamic reduces the total number of operators and brands available to Virginia players.

Michigan is again instructive. The state currently has 15 operating brands with no remaining access points. This has left major operators, including bet365, and several smaller operators and brands from New Jersey and Pennsylvania unable to enter the market. With five casinos in Virginia and three platform agreements each (15 total access points, matching Michigan’s cap), it is highly likely that more than 15 brands will have interest in offering iCasino in the commonwealth. The bottleneck is foreseeable. If sweepstakes casino operators decide to enter, this only congests things further. 

Finally, the state itself misses out. More brands lead to more converted players, which translates to more taxable revenue. Fewer operators entering the market also mean fewer licensing fees collected by the state. Brands matter to players — they drive trust, recognition, and engagement — and a framework that limits brand diversity limits the revenue ceiling for everyone involved.

An opportunity to get it right

Virginia has an opportunity that Michigan did not: the benefit of hindsight. Rather than codifying a one-brand-per-platform restriction that has already proven limiting in another state, legislators can structure the framework to allow operators the flexibility to offer multiple brands under a single platform agreement. This approach would preserve the tethered-license model that rewards Virginia’s brick-and-mortar casinos for their investment in the state, while ensuring the marketplace remains robust, competitive, and capable of maximizing revenue for all stakeholders.

As I noted in my prior piece, once a law is passed, it is always tougher to change it. Now is the time for operators, trade organizations such as iDEA, and legislative education groups like NCLGS to engage with Virginia’s lawmakers and build a case for brand flexibility before the language is set in stone.

The goal is simple: ensure that Virginia’s online casino legislation fosters an environment where operators can be flexible and innovative in the brands they offer — a necessary component of a thriving regulated marketplace and one that directly benefits the commonwealth’s bottom line.

Josh Pearl is an independent gaming consultant assisting various suppliers and operators. Previously, he served as the senior director of new markets & strategic initiatives at Penn Interactive from 2016-2023.