Managing Editor
As the 2026 legislative session gets underway, Indiana lawmakers have been quick to file bills to renew the efforts to legalize online lottery and video gaming terminals (VGTs) in the state. By contrast, there’s no sign of an online casino or poker bill yet, though that doesn’t mean one couldn’t be coming later in the session.
Just a few years ago, Indiana’s success with online sports betting made it the odds-on favorite to become the next state to embrace online casinos. However, a combination of political scandals and pushback from various parties has caused the effort to lose steam. It has seen an online casino bill introduced each year since 2023, but last year’s failed to get a hearing in the crucial Ways and Means Committee.
Broadly speaking, online casino and poker legalization efforts around the country have been facing increasing headwinds, and 2026 may prove to be the most difficult year yet.
Online lottery sales and VGTs have also been perennial proposals in Indiana. As with online casinos, the push has been ongoing for several years without success. However, the speed with which this year’s VGT and online lottery bills were filed suggests that Indiana’s gambling expansion proponents see these other convenience gambling products as having more potential support at the moment.
Because they offer the same games through a different channel, online casinos are often viewed as being similar to their brick-and-mortar counterparts. However, in terms of the consumer demand they fill, online casinos arguably have more in common with VGTs and online lottery. All three provide a quick, standalone gambling experience, while retail casino visits tend to be a longer, more social experience that encompasses other forms of entertainment.
Manning Presses for Online Lottery
Rep. Ethan Manning has been the driving force behind most recent gambling legislation in Indiana. Notably, he helped the state become one of the first to embrace online sports betting, in 2019. That quick adoption allowed Indiana to establish itself as one of the most successful sports betting markets in the country, becoming a role model its neighbors later sought to emulate.
Manning has also been the one to push for online casinos and online lottery, albeit without the same success. Once again, he is the primary sponsor for this year’s online lottery bill.
HB1078 was filed on Monday and immediately referred to the Committee on Public Policy.
It would allow the Indiana Lottery Commission to sell draw tickets over the Internet as well as offer certain types of e-Instants. The latter, it carefully restricts to exclude games that look and feel too much like casino games. For instant, it prohibits depictions of:
- Spinning reels or drums
- Slot-like paylines
- A pull lever as on an old-school one-armed bandit
That is in addition to the state’s existing prohibition on lottery games that include table game imagery or mechanics, such as blackjack-style games or a roulette wheel.
The 2026 VGT Proposal
This year’s effort to legalize VGTs has likewise begun in the House, but has Rep. Christopher Judy as its sponsor. Manning’s online lottery bill also references terminals, but only to clarify their definition for purposes of the state’s existing ban on them. Quite often, VGT proponents find themselves at odds with those advocating for other sorts of gambling expansion, based on who is doing the lobbying. While online casinos and online lottery expand the range of gambling products available to existing stakeholders, legalizing VGTs gives a whole different group of business interests a seat at the table.
In the case of Judy’s proposal, HB1235, that means owners of truck stops and bars, as well as fraternal and veterans’ organizations. Regular convenience stores aren’t eligible, and no one person or company could simultaneously hold licenses for VGTs and other forms of gambling, such as retail casinos.
VGTs would be constrained to return-to-player percentages between 80% and 95%, similar to most retail slots. Their revenue would be taxed at 30%, and the bill mandates that the remainder of the revenue must be split evenly between the games’ distributor and the host property.
The bill voids any pre-existing local legislation against VGTs, but allows municipalities to opt out by passing new laws against them after legalization comes into effect. However, it prohibits municipalities from imposing their own additional taxes or fees on the machines.
Online Lottery or VGTs Could Be a Setback for iGaming
Indiana residents looking for more convenient access to gambling may need to be careful what they wish for, assuming the hope is to have online casinos — and poker! — eventually.
Legalizing an online lottery or VGTs might appear to be a step in the right direction, but historical precedent suggests it might do more harm than good.
Retail casino operators often worry that online gambling will cut into their revenue, but that notion is, at best, controversial. There’s as much evidence that the two verticals synergize as there is that the brick-and-mortar industry suffers in any way.
When it comes to so-called “cannibalization,” the products that most undeniably suffer from competition with online casinos are online lotteries and VGTs. This is for the reason stated earlier: That all three offer essentially the same value proposition, namely convenience.
We see in Illinois, especially, the power that an entrenched VGT industry can wield in fighting proposals for online casinos. Elsewhere, we’ve seen state lotteries fret about whether online casinos will ultimately cost the state more money than they make, offering a much smaller slice of a larger pie, where 100% of lottery revenue goes to public coffers.
In other words, success for either of these efforts in 2026 would expand the state’s gambling options in the short term, but also serve to create new opponents for the online casino effort in future years — and online poker along with it.
