The Council of the District of Columbia’s Committee on Human Services convened for an extensive hearing on Bill 26-0656, the “Internet Gaming and Consumer Protection Act of 2026″. Introduced by Councilmember Wendell Felder (D-Ward 7), the legislation seeks to modernise the District’s gambling landscape by legalising online casinos and, critically, implementing a total ban on the “dual-currency” sweepstakes casino model.
The hearing, which lasted nearly four hours, featured testimony from industry advocates, responsible gaming experts, and regulatory officials. Felder opened the proceedings by framing the bill as a necessary pivot to capture an existing $700 million illegal market.
“This is not about encouraging gambling but recognising reality and responding responsibly,” Felder stated, emphasising that D.C. residents are already wagering on offshore platforms without state-mandated consumer protections.
Strategic Framework: Taxes, Licensing, and Market Access
If enacted, the bill would transform the District into a competitive iGaming hub. Unlike the initial monopoly-style rollout of sports betting in D.C., Felder’s proposal suggests a more open, operator-friendly structure:
- Taxation & Licensing: The bill proposes a 25% tax rate on adjusted gross online casino revenue. Operators would pay a $2 million initial application fee and a $500,000 annual renewal fee.
- Market Structure: Each licensee would be permitted to field two “skins” (online brands), with the Office of Lottery and Gaming (OLG) holding the authority to approve additional skins for “good cause”.
- Expedited Entry: Existing sports betting partners, including BetMGM, Caesars, DraftKings, Fanatics, and FanDuel, would have an expedited timeline for licensure to ensure a rapid market launch.
The Sweepstakes Ban: A Decoupling Strategy
A central and controversial pillar of the legislation is the explicit prohibition of sweepstakes casinos. This move follows a growing trend in North American jurisdictions to close legal loopholes used by “social” casinos to offer real-money prizes under a sweepstakes umbrella.
The council’s approach aligns with recent regional legislative momentum, such as the DC iGaming legalisation and sweepstakes ban bill, which highlighted the District’s intent to protect its tax base from “unregulated competition”. Proponents argue that sweepstakes platforms do not contribute to the District’s coffers and often lack the robust KYC (Know Your Customer) and AML (Anti-Money Laundering) standards required of regulated iGaming operators.
Evaluating Economic Impact and “iLottery” Cannibalisation
During the hearing, OLG Director Randy Burnside addressed concerns regarding “cannibalisation”, the fear that online casinos would drain revenue from the District’s existing iLottery products. While Burnside acknowledged that some overlap is inevitable, he expressed confidence that the net increase in tax revenue from a regulated online casino market would significantly offset any minor lottery declines.
However, the “Stop Predatory Gambling” and “National Association Against iGaming” (NAAiG) panels offered a sharp rebuttal. They argued that the social costs of increased gambling accessibility, including higher rates of addiction and financial distress among vulnerable populations, would outweigh the projected fiscal benefits.
Operational Hurdles: The Path to 2027
While the hearing marks a major step forward, the “Internet Gaming and Consumer Protection Act” still faces a complex legislative path. The Committee on Human Services has not yet scheduled a vote to advance the bill to the full 13-member Council.
For industry executives, the takeaway is clear: D.C. is attempting to correct the mistakes of its previous sports betting rollout by creating a high-tax, competitive, and strictly perimeter-protected market. By banning sweepstakes, the District is attempting to “ring-fence” its digital economy, ensuring that every dollar wagered contributes to the 25% tax pool.
Future Outlook: A New Standard for Urban Jurisdictions?
If passed, Washington D.C. would become one of the few urban-only jurisdictions in the U.S. to offer a full suite of regulated iGaming. The success of the “Felder Bill” could serve as a blueprint for other metropolitan centres looking to bypass state-level deadlock and reclaim revenue from offshore and sweepstakes providers.
The industry will be watching closely for the committee’s next move. If advanced before the summer recess, the District could be on track for an iGaming launch by early 2027, positioning it as a premier digital gaming market on the East Coast.