Pre-filed legislation in Iowa aims to expand the state’s authority in acting against unlicensed gambling activities. This will introduce potential implications for online sweepstakes casinos and other unregulated operations. The two companion bills, House Study Bill 586 (HSB 586) and Senate Study Bill 3040 (SSB 3040), were created to strengthen the enforcement powers of the Iowa Racing and Gaming Commission (IRGC).

Under the proposed legislation, the regulator would be explicitly authorised to issue cease-and-desist orders and pursue injunctive relief against unlicensed gambling entities. By naming sweepstakes operations alongside traditional casino games, sports wagering, and other gambling activities, the bills remove ambiguity over which verticals fall under state oversight.

Expansion of penalties and lifetime bans

The bills also broaden the scope of penalties for certain offences. Lifetime gambling bans could now apply not only to traditional casino violations but also to sports wagering and advance deposit wagering. If enacted, the legislation would allow regulators to act proactively, without waiting for lengthy criminal proceedings.

The proposed framework follows trends in other states, including California, New York, and Tennessee, where lawmakers have introduced measures to tackle sweepstakes-style platforms or clarify that these offerings fall outside lawful promotional gaming exemptions. 

While prediction markets are not explicitly addressed in the bills, the IRGC confirmed that it is “following the litigation in other states with great interest and anticipates ongoing conversations with various stakeholders about the gaming industry in Iowa.”

Greyhound racing under review

Separately, Iowa lawmakers are advancing Senate Study Bill 3002. This narrower measure is focused on pari-mutuel wagering for simultaneously telecast horse and dog races. It removes the authority of the IRGC to issue licenses for pari-mutuel wagering on simulcast dog races to an entity in agreement with the Iowa Horsemen’s Benevolent and Protective Association for source market fees.

The change would restrict one route for simulcast dog race wagering in Iowa but does not completely eliminate the vertical. Licensees would still be subject to existing requirements, including annual licence fees, regulatory fees, and audits of simulcast operations. The current tax structure remains in place, with a 2% levy on wagers exceeding $25 million per year, allocated between the Iowa Horse Racing Fund and the IRGC.

Procedural progress and future plans for Iowa

The legislation, set to take effect from 1 July 2027, states that: “The bill does not otherwise amend or eliminate authorisations for or references in the Code to dog racing generally or wagering on simultaneously telecast dog races under other licences.”

A subcommittee recommended amendment and passage of the bills on 20 January, clearing an early procedural milestone. Stakeholders in Iowa’s gaming sector continue to monitor developments closely.