Iowa Senators unanimously voted in favor of a bill that would equip the state’s gaming regulator with more powers to try to chase out unlicensed gambling operators such as offshore platforms and sweepstakes casinos.
Senate File 2289 was put forth by the state Department of Inspections, Appeals and Licensing and sponsored in the Senate by the State Government Committee. It was approved 44-0 on the chamber floor on Monday.
After that vote, Sen. Mike Klimesh requested unanimous consent that SF 2289 be immediately transmitted to the House, a motion that was granted.
Iowa regulator says it is powerless right now
The bill would increase the scope of the measures the Iowa Racing and Gaming Commission could take to try to shut down unapproved gaming sites by newly allowing it to issue cease-and-desist letters and pursue injunctive relief against operators.
Iowa allows several forms of gambling under license, including some land-based and riverboat casino gaming and online sports betting, but does not allow online casino gaming.
IRGC administrator Tina Eick said earlier this year that while the regulator can hold its licensees accountable, under current state law, the commission cannot do much to curb unlicensed gaming beyond issuing public warnings to Iowa residents about being careful which platforms they use.
If this bill were to pass the House and be signed into law by Iowa Gov. Kim Reynolds, the regulator would be given the same kind of powers as its counterparts in many states already hold.
“Not only do we have a responsibility in the legislature to ensure that our regulators are regulating the gambling industry, we also have a responsibility to protect those licensees from illegal operators,” Sen. Dan Dawson told the Senate floor when presenting the bill for a vote. “Probably the most important provision is to ensure that we allow our regulator to attack — legally — these out-of-state actors who are providing an illegal service here in the state. There has to be a value to holding a gambling license in the state of Iowa.”
Offshores and sweeps in the crosshairs
The text of the bill lists several categories of gaming operators as the kind of entities that the IRGC could target, including those that offer games of chance, sports betting or pari-mutuel wagering, advance deposit wagering (ADW), online fantasy sports and “illegal sweepstakes.” It does not offer any kind of specific definition for a sweepstakes gaming site.
Not only would violators be guilty of a Class D felony for offering such products without a license, but anyone twice convicted of unlawful betting would be banned for life from sports betting and ADW.
One category not listed is prediction markets. Numerous platforms such as Kalshi and Crypto.com offer sports event contracts in Iowa. FanDuel and DraftKings, both of which are licensed online sportsbooks in Iowa, both offer their prediction products in the state but do not offer access to sports markets on those platforms.
However, a separate bill filed in the Iowa Senate this year proposes attempting to license, regulate, and tax prediction markets. That bill has made no progress since being referred to the Ways and Means Committee in January.
