Sweepstakes in the Crosshairs as Iowa Introduces Bill to Crack Down on Unlicensed Gaming

Iowa lawmakers have introduced another measure seeking to get the local gaming industry under stricter control. Per House Study Bill 586 and its Senate counterpart, Senate Study Bill 3040, the local regulator would receive additional powers to stop unlicensed gaming.

Iowa Joins the Fight Against Sweepstakes

Yesterday, the House State Government Committee introduced HSB 586, complementing SSB 3040, which was filed earlier this month. The measures seek to provide the Iowa Racing and Gaming Commission (IRGC) with extra powers, allowing it to pursue civil enforcement action against unlicensed gaming.

While the two measures have yet to advance, they carry significant implications for the growing sweepstakes sector, which has been facing intense scrutiny across America. Despite claiming that their dual-currency products do not fall under the legal definition of gambling, sweepstakes operators have become the subject of intense scrutiny by regulators and traditional sports betting industry stakeholders.

As a result, multiple states have been seeking to tighten their rules against unlicensed forms of gaming, with some succeeding in introducing rules that directly prohibit sweepstakes products.

The IRGC Will Be Allowed to Take Direct Action

By allowing the IRGC to pursue civil enforcement action against unlicensed operators, the regulator will be able to directly tackle a variety of illegal or grey market products involving real-money games of chance or dual-currency products.

Per the new bills’ wording, the IRGC will also be allowed to issue cease-and-desist orders and pursue injunctive relief, providing it with more power to directly intervene rather than forcing it to resort to warnings and depend on other regulatory bodies.

This adds to the woes of the embattled sweepstakes sector, which has been beset by lawsuits, cease-and-desist orders, and regulatory action.

Other States Are Also Pushing Back Against Sweepstakes

In the meantime, many other states are also considering or already advancing stricter rules on illegal gambling. Indiana, for example, is currently mulling over new draft laws that would ban sweepstakes casinos, as well as the online sale of lottery tickets.

Maryland is likewise trying to shutter the sweeps sector via House Bill 295 and Senate Bill 112, which aim to tighten the local rules. These efforts come in the wake of similar bills that failed to gain traction in 2025.