West Virginia becomes latest US state to seek gambling tax increases
House Bill 4397 and House Bill 4398, sponsored by Delegate Chris Burkhammer with additional sponsorship on the interactive wagering measure, propose amendments to existing sections of state law governing regulated gambling operations.
Together, as introduced, the bills represent the most substantial proposed overhaul of West Virginia gambling tax policy since the state legalised sports betting in 2018.
House Bill 4397 targets interactive wagering, commonly referred to as online casino gaming. The bill amends Section 29-22E-16 of the West Virginia Code to increase the privilege tax applied to adjusted gross interactive wagering receipts.
Under current law, licensed operators remit 15% of adjusted gross revenue to the state. The proposed legislation would raise that rate to 25%.
The structure of tax collection would remain unchanged, with operators required to submit weekly electronic reports and remit payment to the state lottery commission by the Wednesday following each reporting week.
The bill maintains the existing framework that positions the privilege tax as a substitute for most other state and local taxes related to interactive wagering operations, while continuing to prohibit tax credits for investments in gaming equipment or facilities.
House Bill 4398 applies a similar approach to sports wagering. The measure amends Section 29-22D-16 of the state code to increase the sportsbook privilege tax from 10% to 25% of adjusted gross sports wagering receipts.
As with interactive wagering, the bill preserves the weekly reporting and payment schedule and continues to allow operators to carry forward negative adjusted gross receipts when payouts exceed wagering revenue.
The proposal leaves intact the provision that sports wagering privilege taxes replace most other state and local taxes tied directly to sportsbook operations.
No longer operator-friendly
Taken together, the two bills would reposition West Virginia from one of the lowest-tax gambling jurisdictions in the US to one of the more aggressively taxed markets.
West Virginia’s current rates have been widely viewed as competitive and operator-friendly.
Since the launch of legal sports betting in 2018, the 10% sportsbook tax has generated approximately $72.5m in cumulative revenue for the state.
In November 2025 alone, state lottery data showed roughly $1.2m in sportsbook tax collections derived from more than $52.7m in total wagers.
If enacted, the proposed changes would represent a 150% increase in the sportsbook tax rate and a 66% increase in the interactive gaming rate.
The implication for operators is a sharp reduction in post-tax margins in a relatively small population state where scale is already limited.
The onus of adjusting to these higher rates would fall primarily on licensed operators, though the broader market effects could extend to promotional activity, betting odds and product availability.
Following the pack
West Virginia’s proposals align with a broader national movement towards higher gambling tax rates.
Over the past two years, several states have revisited their original tax frameworks as legal sports betting and iGaming markets matured. Ohio doubled its sportsbook tax from 10% to 20% in 2023.
New Jersey, after considering a 25% top rate, ultimately set a 19.75% tax for both sports betting and online casino gaming, effective 1 July.
Maryland increased its mobile sportsbook tax from 15% to 20%, while Louisiana raised its rate from 15% to 21.5%.
Illinois has adopted one of the most aggressive models, implementing a tiered sportsbook tax structure that begins at 20% and climbs as high as 40% for the largest operators, alongside a per-bet fee.
Subsequent data suggests the impact on wagering activity has been significant.
According to figures published by the Illinois Gaming Board, October 2025 saw approximately 6.4 million fewer sportsbook wagers than the same month in 2024.
September data had already reflected a year-over-year decline of roughly 15% in total bets placed, raising concerns about elasticity and consumer behaviour under higher tax burdens.
Additional pressure is emerging elsewhere, too. Massachusetts lawmakers have initiated discussions around a 51% sportsbook tax for 2026.
This would place the state alongside New Hampshire, New York and Rhode Island among the highest taxed sports betting markets in the country.
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