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New bill would give Iowa regulators authority to crack down on illegal gambling sites
Lawmakers proposed a bill that would allow for the Iowa Racing and Gaming Commission to issue cease-and-desist orders to illegal gambling platforms operating in the state.
The Iowa Racing and Gaming Commission is well aware of the pervasive nature of offshore online casino sites and sweepstakes online casinos, and the state regulator is looking to take action against those sites. A piece of legislation was proposed in Iowa that would give the gaming commission authority to issue cease-and-desist orders to unlicensed gambling operators in the state, specifically to operators of games of chance, gambling, sports betting and sweepstakes.
Iowa regulators want to crack down on illegal gambling operators
Tina Eick, the gaming commission's administrator, told the Iowa Capital Dispatch that current state laws do not carve out "clear authority" for the group to take action against entities other than licensed retail casinos and sportsbooks.
With the bill's passage, the commission would have the ability to go after "bad actors" that post a threat to Iowa residents, as their unregulated operations are perceived by state officials as scams that do not protect users' personal and financial information.
The Iowa Department of Inspections, Appeals and Licensing filed the bill ahead of the 2026 legislative session, which is set to begin in mid-January.
The American Gaming Association released a report in August that U.S. residents gamble more than $673 billion annually with illegal and unregulated gambling operators, which comprise a black-market industry that has grown 22% since 2022.
Per the AGA, the illegal market has resulted in an estimated loss of $15.3 billion in state tax revenue at licensed casino apps and confusion for anyone looking for a real money online casino.
Gaming commission administrator warns residents of 'bad actors'
While the Iowa Racing and Gaming Commission awaits the possibility of beginning to crack down on illegal gambling operators, Eick described which sites state residents should avoid. She warned that these unlicensed platforms could target users' personal and financial information.
For starters, any site that offers Iowans the chance to place online casino games for real money is a "fake" and should not be trusted, as online casinos remain illegal in the state.
Secondly, state residents should avoid platforms that market sweepstakes games and cryptocurrency payouts.
Iowa the latest state to take aim at illegal operators
Should the bill pass and the gaming commission begins sending out cease-and-desist orders, Iowa would become the latest state to attempt to shut down illegal gambling operators in the sweepstakes space.
New York Gov. Kathy Hochul recently signed a Senate bill to ban online sweepstakes casinos in the Empire State, the sixth jurisdiction to enact a law to outright prohibit operators.
There have been a number of other states – from Michigan to Minnesota to Arizona – that have issued dozens upon dozens of cease-and-desist letters to sweeps casinos ordering them to pack up and leave.
Toward the end of 2025, Tennessee Attorney General Jonathan Skrmetti announced that his office sent out cease-and-desist orders to 38 websites offering online casino-style games.
