Iowa regulators are urging lawmakers to approve legislation that would strengthen the state’s ability to act against unlicensed gambling platforms operating outside regulatory oversight. The bill, filed ahead of the 2026 legislative session beginning Jan. 12, would authorize the Iowa Racing and Gaming Commission to issue cease and desist orders and pursue injunctive relief against unauthorized operators.
The proposal was drafted by the Iowa Department of Inspections, Appeals and Licensing. Tina Eick, administrator of the Iowa Racing and Gaming Commission, said current law restricts the agency’s reach to licensed casinos and sportsbooks.
Illegal Market Pressure And Enforcement Limits
Under existing statutes, regulators can mainly issue public warnings to residents when unlicensed gambling platforms target the state. Eick said the bill would provide enforcement tools already used by regulators in many other jurisdictions.
Data from the American Gaming Association highlights the scale of the issue nationwide. The association estimates Americans wager more than $673 billion annually in illegal or unregulated gambling markets, a figure that has increased 22 percent since 2022. The growth has been linked to illegal online gambling, unlicensed sports betting, and unregulated skill machines. The association also estimates states lose $15.3 billion in gaming tax revenue each year as a result.
Common Forms Of Illegal Gambling
Eick said Iowa regulators frequently encounter fraudulent websites that mimic licensed casinos to collect personal and financial information. Because online casino gambling is illegal in Iowa, Eick said any online casino advertising connected to local operators is fraudulent.
Another category involves sweepstakes platforms that advertise cryptocurrency cashouts. According to Eick, complaints often arise when players attempt to withdraw winnings and cannot access their funds. Offshore sports betting companies also pose problems because they are not licensed in Iowa and may offer wagers prohibited under state law.
“We have a strong regulatory system that ensures the games are fair,” Eick said. “We hold those operators accountable – their information and their funds are secure, and then they have responsible gaming, self exclusion programs in place, and then we tax them. They pay their fair share of taxes to Iowa.”
What The Bill Would Address
The legislation identifies multiple forms of gambling subject to enforcement, including games of chance, sports betting, pari-mutuel wagering, advance deposit wagering, online fantasy sports contests, and illegal sweepstakes. It also expands lifetime gambling bans to include sports betting and advance deposit wagering and applies them to individuals convicted twice of unlawful betting.
Supporters say the proposal would align Iowa with states that already use cease and desist orders against offshore and sweepstakes operators.
Prediction Markets Remain Unresolved
Eick said the bill does not seek to regulate sports prediction markets, which fall under federal oversight and raise separate concerns for state regulators.
“It lacks some of the consumer protections that we see in the regulated gaming industry that we currently have in Iowa,” Eick said.
She said the bill may serve as a starting point even if it does not pass.
“The bottom line is, illegal gaming undermines the public trust and puts Iowans at risk,” Eick said.
Source:
“Iowa gaming regulators hope to curb illegal wagering platforms with proposed bill”, iowacapitaldispatch.com, January 5, 2026
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