Virginia Lottery warns long-term funding shortfall for casino regulation; urges planning for gaming commission financing

The Virginia Lottery told the Joint Subcommittee on Gaming on Oct. 22 that licensing fees now pay for the state’s casino regulation but will not sustain regulatory operations over the long term.

Khalid Jones, executive director of the Virginia Lottery, told the panel that “the licensing fee revenue will not be sufficient going far into the future” and that the agency is already projecting an approximate $7 million annual shortfall as the industry and regulatory responsibilities expand.

The Lottery currently collects a $15,000,000 initial casino licensing fee (good for a 10-year period) and a $200,000 sports-betting operator fee with three-year renewals. Jones said the agency has used those licensing fees to fund a roughly 100-person gaming compliance staff, maintain a 24-hour Lottery presence at operating casinos and cover investigations, audits and data analytics. He said the agency expects to receive an additional $30 million in casino licensing fees once two pending casinos are licensed, which would cover operations through roughly fiscal 2029–2030.