West Virginia Becomes Latest US State to Seek Gambling Tax Increases

by Kevin Lentz, 28 January 2026

West Virginia seeks steep gambling tax increases, challenging the low-tax model that once made the state operator-friendly.

West Virginia considers raising gaming taxes by two-thirds. © Joshua Hummel, Unsplash

Key Facts:

• Two separate Bills look to raise online gaming taxes: HB4397 and HB4398.
• HB 4397 would raise iGaming tax from 15% to 25%.
• HB 4398 would raise online Sports betting taxes from 10% to 25%.
• Both bills sponsored by Delegate Chris Burkhammer.

West Virginia joins a growing list of states considering hiking taxes on gaming in 2026. Lawmakers this week introduced two new bills that would hike taxes on online casinos by 66% and sports wagering by 150%.

Delegate Chris Burkhammer filed Bills 4397 and 4398, which, if passed, would be the first hikes since iGaming became law in 2019 or since sports betting was legalised in 2018.

Online Casino Taxes

House Bill 4397 targets the online casino sector. The first online casinos opened in 2020, and despite a small population of about 1.7 million, the industry generated $246 million in revenue by 2024.

That number was up by more than 50% from 2023, and while 2025 total revenue hasn’t been announced yet, it’s likely to have grown by another 50% plus last year as well. That kind of rapid growth doesn’t go unnoticed by legislators staring down a $400 million deficit in the 2026 fiscal year .

The bill would raise tax rates from 15% to 25%, which, with a little back-of-the-envelope figuring would seem to be an extra $30 to $40 million if 2025 total revenue comes in around $350 million.

Whether that steep a hike might cause operators to pull back on promo and free play, as well as on technological innovation that has helped fuel that rapid growth, is anyone’s guess. But legislators are already seeing tax revenue grow by 50% a year simply by not killing the goose that lays the golden eggs.

Sports Betting Taxes

HB4398 applies the same logic to sports betting, raising the tax rate from 10% to 25% for both online and retail wagers. 2024 saw gross revenue of around $56 million. While it has grown, it’s not at the eye-popping rate of online casinos and in fact early numbers suggest handle (total amounts wagered) may have actually fallen in 2025.

This would seem to make it harder to make the case for a 150% tax hike, but the current 10% rate is one of the lowest in the nation. However, a 25% rate would put it at the upper end nationally. Combined with declining year-over-year revenue and a very small addressable market, already squeezed margins might prompt some operators to contemplate an exit.

A very large number of West Virginia population centres sit on or very near state lines; think Wheeling, Morgantown, and Huntington, as well as the entire Eastern Panhandle.

If the states’ online sportsbooks cannot match promotional spend or keep odds competitive with those of nearby operators in other states, they could quickly haemorrhage cash flow as bettors flock across state lines.

Here again, the question is whether legislators are willing to test whether short-term tax revenue gains outweigh the longer-term risk of reduced betting activity in a state where sports betting margins were never especially wide to begin with.

Conclusion

Taken together the two new bills would mark a sharp pivot for a state that has always prided itself on a gambling market built on low taxes and common-sense regulation.

But as more states revisit early tax frameworks in search of a short-term budget fix, West Virginia may offer an early test on just how much pressure smaller, border-impacted online gaming markets can take before business begins to leak away.

Whether the state wants to gamble with higher rates that may produce sustainable increases in tax revenue or risk undercutting one of the fastest-growing iGaming markets in the country by sending sports betting dollars to Maryland or Pennsylvania remains an open question.