Washington D.C. council member Wendell Feld recently introduced a legislative proposal that has caused quite a stir within the American gambling regulatory community. The bill, numbered B26-0656, titled "Internet Gambling and Consumer Protection Act," was officially submitted to the District Council last Thursday. Its core logic is quite clear: on one hand, it establishes a legal regulatory framework for online casinos, and on the other, it imposes a ban on the currently prevalent lottery-style casino platforms. Feld included a pragmatically worded explanation with the bill submission—this matter cannot be delayed, as inaction means continued tax revenue outflow and consumers remaining exposed to risks, while neighboring jurisdictions that have already taken action will only leave the District further behind. The data he provided is also quite striking: in 2024, District residents are estimated to wager up to $700 million on unlicensed and offshore gambling platforms, money that currently neither contributes to the District's finances nor safeguards consumer funds.
No cap on licenses, entry fees start at $2 million
Unlike some states that limit the number of licenses, Feld's proposal's core idea is "open doors, strict checkpoints." The District Lottery and Gambling Office will act as the regulatory body, with no cap on the number of licenses, but the entry threshold is not low: operators must pay a $2 million application fee, the initial license is valid for five years, and the renewal fee is $500,000. Software suppliers must pay a $50,000 license fee, with a renewal of $25,000. Operators already holding a District sports betting license will get priority in the approval process.
In terms of game types, the bill authorizes license holders to offer classic online casino games such as slot machines, blackjack, roulette, and poker, with a minimum betting age set at 21 years old. Compliance requirements are also quite stringent: operators must verify player identity and location through geolocation and cybersecurity controls, and at least 35% of business expenditures must be directed towards local enterprises in the District, or they will face financial penalties.
On the tax structure, the bill sets a 25% adjusted gross revenue tax rate from gambling, with negative income carried over monthly. For the first three years, operators cannot deduct promotional expenses from gross income, with a promotional deduction cap of 1.75% of gross income after three years. Responsible gambling clauses are also written into the bill—operators must set daily, weekly, and monthly deposit and loss limits, as well as a minimum 72-hour cooling-off period.
How to channel back $700 million in grey funds: Four accounts for tax revenue allocation
The direction of tax revenue is one of the most noteworthy parts of this bill. The first $500,000 in annual tax revenue will be allocated to the District Behavioral Health Bureau for prevention, education, treatment, and rehabilitation services for gambling addiction. The remaining funds will be distributed as follows:
30%—Insurance, Securities, and Banking Bureau, for debt management and financial consulting projects;
33.3%—Victim Services and Justice Grants Office, for domestic violence victim services;
30%—Employment Services Bureau, for youth technology sector workforce training;
10%—Health Bureau, for gambling behavior research.
Feld estimates that initial annual tax revenues could reach tens of millions of dollars, with further upward potential as the market matures. This allocation scheme is straightforward: it not only plugs the leak of grey funds but also ensures that every penny of tax revenue from legalization finds a clear public value outlet.
Lottery casinos precisely defined, violations subject to up to $500,000 fines
The bill also delivers a heavy blow to lottery casinos—those platforms that exploit "dual currency systems" to navigate through regulatory gaps. The bill defines dual currency gambling products as "games, promotional schemes, or platforms that use two or more forms of currency, points, tokens, entry tickets, or similar units, where one or more units can be directly or indirectly exchanged for cash, cash equivalents, or prizes."
The enforcement toolkit is also well-equipped. The District Lottery and Gambling Office can issue cease orders to non-compliant lottery platforms, with civil penalties of up to $100,000 per violation, and repeat violations can soar to a maximum of $500,000. The District Attorney General can also initiate civil lawsuits to recover illegal profits.
PASA official website continues to track gambling legislation dynamics across the states, noting that Washington D.C.'s ban on lottery casinos is not an isolated action. Earlier this month, Maine Governor Janet Mills signed a bill banning online lottery gambling, and Indiana will join this camp in 2026. If the District successfully passes this, it will become the third U.S. jurisdiction to issue a ban on lottery casinos this year. However, not all states' similar efforts have been smooth—proposals for bans in Mississippi and Maryland have previously failed, indicating that this regulatory storm still faces significant resistance.
Legislative obstacle course timeline: Council hearing followed by Congressional approval
The legislative path for the bill is far from over. The District Council Public Services Committee has set April 21 as the review date. If the council approves, according to the District's "Home Rule Act," the bill must then be submitted to Congress for a 60-day review period. If Congress does not obstruct, regulatory agencies will have 90 days to establish implementation details, aiming to officially launch the market within 180 days after the regulations take effect.
Opposition has already begun to emerge. Some question whether the annual $500,000 allocation for addiction treatment is sufficient to cover the social costs brought by online casinos; others believe that the $2 million license fee plus a 25% tax rate essentially sets a tailored entry threshold for large operators, effectively blocking smaller players. Currently, only eight states (New Jersey, Pennsylvania, Michigan, Delaware, West Virginia, Connecticut, Rhode Island, and Maine) have legalized online casinos, and whether Washington D.C. can become a new face in this camp will be determined by the legislative tug-of-war in the coming months.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel: https://t.me/pasa_news
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