West Virginia lawmakers are considering a new bill that could reshape the online casino landscape in the state.
The proposed legislation (HB 4397/HB 4398) aims to increase the tax rate on online casino revenues from 15% to 25%.
Currently, West Virginia has one of the lowest tax rates among states with legalized online casinos in the U.S. But by increasing the tax rate, the Mountaineer State hopes to significantly increase revenue collections.
Understanding the Growth of Online Casinos in West Virginia
The online casino sector in West Virginia officially launched in July 2020, following the passage of the Lottery Interactive Wagering Act.
From its humble beginnings, the industry has experienced unprecedented growth, with revenue reaching $35.9 million in December 2025 alone—an impressive 58% increase year over year. This upward momentum signals a thriving market that continues to break records each fiscal year.
Under the current 15% rate, the state collected $33.9 million in taxes during the first half of fiscal year 2026. With a 25% rate, tax revenue could potentially soar to $56.5 million, contributing millions more to state funds annually.
Comparing Tax Rates Across States
Despite the proposed increase, West Virginia's tax rate would remain competitive compared to other states. Here's a breakdown of how West Virginia's proposed tax rate would stack up against states with legalized online casinos.
- Rhode Island:Â 62.45%
- Delaware:Â 57%
- Pennsylvania:Â 54%
- West Virginia (Proposed):Â 25%
- New Jersey:Â 19.75%
- Connecticut:Â 18%
States such as Pennsylvania and Rhode Island impose much higher rates, exceeding 50% on slot machines. A 25% tax rate would position West Virginia closer to states like Michigan and New Jersey, which have tax rates between 19.75% and 28%.
The Debate: Balancing Growth and Revenue
Supporters of the tax hike argue that the additional revenue could be used to fund essential services such as education and infrastructure, benefiting the broader community.
According to Saturday Down South, here’s a look at how online casino revenue has continued to grow each year:
However, critics caution that higher taxes may discourage casino operators from offering promotions or investing in market expansion, potentially impacting the industry's competitiveness and growth.
Regulatory Oversight and the Future of Online Casinos
The West Virginia Lottery Commission closely regulates the state’s online casino industry.
All operators must meet stringent requirements, including independent game testing and secure management of player funds. Additionally, each online casino must be affiliated with one of the state’s five land-based casinos, ensuring robust oversight and alignment with regional economic interests.
As lawmakers deliberate the proposed tax changes, West Virginia's online casino industry remains on an upward trajectory. In fact, the state continues to add new options regularly.
With the potential for increased state revenue balanced against the need to maintain a competitive market, the future of online casinos in West Virginia looks promising. The industry's continued growth into 2026 highlights its role as a vital economic contributor, with the potential tax changes poised to usher in a new chapter.
