Proposed Iowa Law Would Empower State Regulator To Confront Sweepstakes Casinos

The cease-and-desist order has become an increasingly successful weapon of choice for state regulators and attorneys general in the past year, as they attempt to rid their states of unlicensed gambling operators, including off-shore sportsbooks and sweepstakes casino sites.

The Iowa Racing and Gaming Commission (IRGC) doesn't have them in its legal arsenal yet. But a proposed bill would allow the IRGC to specifically target "illegal sweepstakes" with cease-and-desist orders, and grant it the right to seek injunctive relief against operators it deems illegal, per Penn Live.

By a quirk of current Iowa law, the IRGC has oversight over only authorized licensed casinos, and retail and mobile sportsbooks. The proposal adds a key phrase to existing law to close the loophole, empowering the IRGC to take action "including but not limited to issuing cease-and-desist orders and obtaining injunctive relief against a person offering games of chance, gambling, sports wagering, or illegal sweepstakes in this state without holding an appropriate license issued by the commission or otherwise being specifically authorized by law."

Iowa's approach is unique compared to other states that have fought against sweepstakes casinos in that it bypasses the process of actually banning them with a separate law. It does so by extension of the proposed new wording in current law, seeking to render them "illegal" if they are not properly licensed or if the industry isn't specifically authorized.

Iowa joins national sweeps pushback

Five states -- California, Connecticut, Montana, New Jersey, and New York -- outlawed sweepstakes sites in 2025. Several state legislatures were mulling action in what ended as a very bad year for the industry, which attempted to rebrand through the Social Gaming Leadership Alliance as "Social Plus" to assuage negative publicity. Louisiana, Minnesota, Mississippi, and Tennessee are also among the states that have forced out sweeps casinos through cease-and-desist orders in the past year.

While there has been a strong resistance in many states, nuance remains. In Indiana, legislators began their session debating what action to take, and whether sweepstakes casinos were technically illegal there.

The Iowa proposal does not have a bill number and does not appear to have been introduced yet. The state's legislative session opened Monday.