A bill that would let Iowa’s gaming regulator issue cease-and-desist orders to sweepstakes casinos is now before state lawmakers.
Senate Study Bill 3040, filed by the Iowa Department of Inspections, Appeals, and Licensing, was introduced ahead of the 2026 legislative session, which began January 12.
As Sweepsy previously reported, the bill would amend Section 99F.4 to let the Iowa Racing and Gaming Commission 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” without a valid state license.
The code is amended to read as follows:
“13. To take any other action as may be reasonable or appropriate to enforce this chapter and the commission rules, 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.“
The IRGC currently lacks authority to act against unlicensed operators. Administrator Tina Eick has said the commission’s only recourse against bad actors is to warn Iowans to check websites before entering personal information.
Bill doesn’t actually make sweepstakes illegal
A key distinction: SSB 3040 uses the phrase “illegal sweepstakes” but never defines what that means or creates any new prohibition.
The bill grants enforcement tools against things the IRGC considers to already be illegal — but it doesn’t establish that sweepstakes casinos are illegal, ban them, or set any criteria for what makes a sweepstakes operation unlawful.
The IRGC would be operating on an interpretation that certain sweepstakes are already illegal under existing Iowa law. That’s an assumption baked into the language, not something this bill establishes.
This approach is weaker than the outright bans passed in California, Connecticut, Montana, New Jersey, and New York. Those states explicitly made sweeps casinos with dual-currency gameplay illegal by statute.
Iowa’s bill leaves the underlying legality question unanswered while handing the regulator an enforcement mechanism. This creates a potential whack-a-mole situation where operators can stay until individually targeted.
Other states considering sweepstakes legislation in 2026 include Indiana, Maine, and Florida.
