The Iowa legislature has approved a significant enforcement bill aimed at enhancing the regulatory framework for unlicensed operators, particularly targeting sweepstakes casinos and unauthorized daily fantasy sports (DFS) platforms. In a separate initiative, lawmakers are also moving forward with legislation designed to impose taxes and regulations on prediction market contracts.
Senate File 2289, which has received unanimous approval from both legislative chambers, is now awaiting final enactment after the Senate agreed to amendments made by the House on April 28. This bill, introduced by the state’s Department of Inspections, Appeals, and Licensing and sponsored by the State Government Committee, seeks to broaden the enforcement capabilities of the Iowa Racing and Gaming Commission (IRGC).
Previously, the IRGC could only hold licensed operators accountable, with limited authority to act against unlicensed entities, primarily issuing public warnings. However, if enacted, SF 2289 would grant the IRGC the explicit power to take action against illegal gambling operators, including those running sweepstakes, through cease-and-desist orders and other forms of injunctive relief.
The bill empowers the regulator to take reasonable actions against individuals offering games of chance or illegal sweepstakes without the necessary licenses. Notably, it does not outright ban sweepstakes casinos or DFS operators, unlike regulations in states such as Indiana and Maine. Instead, it enables the IRGC to pursue enforcement actions against unlicensed platforms deemed illegal under Iowa law.
Violators of this bill could face Class D felony charges, with individuals potentially barred from participating in regulated gaming within the state. SF 2289 is now set for final enrollment and will be sent to the governor for approval.
Additionally, Senate File 2470, which focuses on prediction markets, has progressed from a House subcommittee after its initial passage in the Senate. This bill addresses popular prediction market contracts related to sports and political events, defining them as financial derivatives with a fixed payout based on the occurrence of specific future events.
SF 2470 establishes a licensing and regulatory framework for operators wishing to offer event-driven contracts in Iowa. Key provisions include a $20 million initial permit fee, a $100,000 annual renewal fee, and a 20% tax on adjusted net revenue. Furthermore, a separate excise tax of 20% may apply to the cost of entering contracts if the primary tax structure is deemed unenforceable, while explicitly excluding sports betting, fantasy sports, and pari-mutuel wagering.