Fight Against Illegal Gaming Sites On Iowa 2026 Legislative Agenda

By Bill Speros

Jan 7th, 2026 2:08 PM EST

(Alamy Images)

Joining their peers across the nation, legislators in Iowa will target illegal gaming sites in their 2026 legislative session, which begins Monday. Legislators nationwide this year aim to close what they see as a growing enforcement gap in the fight against illegal gambling.

Legislation filed ahead of Iowa’s 2026 session would expand the authority of the Iowa Racing and Gaming Commission, allowing it to act directly against unlicensed and offshore gambling operators targeting state residents.

Under current law, the commission’s enforcement power largely stops at licensed casinos and sportsbooks. When illegal platforms target Iowans, regulators are often limited to issuing public warnings rather than taking direct action.

The proposed bill, submitted by the Iowa Department of Inspections, Appeals and Licensing, would change that. If approved, it would authorize the commission to issue cease-and-desist orders and seek injunctive relief against offshore sportsbooks, illegal online casinos, and other unregulated gambling operations operating in or marketing to Iowa.

Commission Administrator Tina Eick told Iowa Capitol Dispatch that the the lack of enforcement authority leaves consumers exposed, particularly as fraudulent platforms become more sophisticated.

“When Iowans gamble on unlicensed platforms, they’re putting their money and their personal information at serious risk,” Eick said. “So we’re trying to be proactive here.”

More Aggressive, Modern Litigation Needed: Experts

At the National Council of Legislators from Gaming States winter meeting last month, the subject of illegal gambling sites clashed with a discussion on those so-called sweepstakes sites.

Jay Atkins, director of government affairs at FanDuel and a former first assistant attorney general of Missouri, said efforts like Iowa’s reflect a broader problem facing regulators nationwide: gambling laws that were written for a very different era.

“Most of these statutes were drafted when illegal gambling meant guys throwing dice in a back alley,” Atkins at the conference, held in San Juan, Puerto Rico. “You could walk in, arrest somebody, collect your evidence, drag them in front of a local jury, and shut the game down.”

That framework, he said, doesn’t work against modern offshore and online gambling operations.

“The law has not caught up with the technology and the modus operandi of today’s illicit gaming platforms,” Atkins said.

Atkins and others believe states should also consider more aggressive legal strategies, including the use of concurrent original jurisdiction — allowing state and local courts to pursue the same cases simultaneously — and move to sanction financial institutions and others who help offshore sites operated.

Iowa Follows Action Elsewhere In The U.S.

Iowa officials say illegal gambling activity in Iowa generally falls into three areas: sites designed to steal personal and financial information, sweepstakes-style casinos that promise crypto cashouts that never arrive, and offshore sportsbooks offering wagers prohibited under Iowa law.

The proposal comes as illegal gambling continues to grow nationwide. According to the American Gaming Association, Americans wager more than $673 billion annually through illegal or unregulated channels — a figure that has jumped 22% since 2022. The association estimates states lose roughly $15.3 billion in tax revenue each year as a result.

Multiple states, including Michigan, have sent cease-and-desist orders to sites it claims offer illegal casino, sweepstakes, or sports betting in the state. Florida plans to follow suit this year. Tennessee Attorney General Jonathan Skrmetti sent cease-and-desist letters on Dec. 29 to dozens of online sweepstakes operators accused of illegally operating in the state.

“The only thing you can be sure about with an online sweepstakes casino is that it's going to take your money,” Skrmetti said in a release. “They work hard to make these sweepstakes casinos look legitimate, but at the end of the day they are not. They avoid any oversight that could ensure honesty or fairness.”

States Take Hard Line Against Sweepstakes Casinos

California and New York have taken an even harder line. A ban on the use of "Golden Coins" went into effect in California on Jan. 1, eliminating the financial benefit sweepstakes casinos could offer there. Many have left the state. New York Gov. Kathy Hochul signed legislation in December banning sweepstakes casinos outright. Earlier in 2025, Attorney General Letitia James, working with the New York State Gaming Commission, issued cease-and-desist letters to 26 sweepstakes operators, arguing the model violated the state constitution.

Iowa regulators say the proposed legislation would give the state similar tools — and move enforcement beyond consumer warnings and into direct action against illegal gambling operators.

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