Senate File 2289, a proposal to strengthen the Iowa gaming regulator’s arsenal against unregulated gaming operators, has just passed the legislature.
The bill will now head to Governor Kim Reynolds (pictured), who can either sign it or veto. It would become effective upon enactment.
Iowa Regulator Currently Lacks Power
SF 2289 looks to amend current state law, allowing the Iowa Racing and Gaming Commission (IRGC) to issue cease-and-desist letters or obtain injunctive relief (requiring a halting in activities) against the following types of unlicensed operator in the state:
- “a person offering pari-mutuel wagering or advance deposit wagering”
- “a person offering internet fantasy sports contests”
- “a person offering games of chance, gambling, sports wagering, or illegal sweepstakes”
We’ve seen multiple anti-sweepstakes bills in recent times, but SF 2289 is not one of them.
The truth is, Iowa is behind the curve when it comes to powers to be used against illegal operators – it’s in a minority of states where the gaming regulator doesn’t already have the power to issue cease-and-desist letters. The IRGC’s Tina Eck has previously said that the Commission can only really issue public warnings for now.
SF 2289 would change this by amending Chapters 99D, 99E, and 99F of the Iowa Code.
Extended Iowa Session Allowed SF 2289 to Pass
The original projected end date for Iowa’s 2026 session was April 21, but lawmakers have worked beyond the deadline this year. As part of this, SF 2289 passed the Senate yesterday, marking the completion of its journey through both chambers.
The proposal was originally titled Senate Study Bill 3040, but the name changed to SF 2289 when it left the committee stage. In fact, it was initially drawn up at the committee level, showing broad backing and therefore a higher likelihood of progression. This eventually bore out in unanimous support across both chambers, with the bill passing without an opposing vote.
Now we wait for a decision from Governor Reynolds, and if the bill passes into law, sweepstakes operators in Iowa (of which there are over a hundred) could well be targeted with C&Ds. This is not always enough to force an operator to leave, but cases could progress to injunctive relief through the courts.
That being said, the option of injunctive relief does not guarantee it will be used. We sometimes see state regulators stop at C&Ds, even if operators don’t leave. Maryland springs to mind as an example of this.
The thing is, various sections of Chapter 99 of the Iowa Code prohibit gambling offered without a state licence, but Iowa doesn’t currently have a clear law that specifically outlaws sweepstakes casinos.
Instead, as in many states, these platforms sit in a gray area. Operators argue that the dual-currency format – often using Gold Coins and Sweepstakes Coins – doesn’t involve any true ‘consideration’, or actual money being wagered.
And SF 2289 doesn’t really change this for now, but it does tighten things up by giving regulators more authority to act against “illegal sweepstakes”, and other formats deemed to be unwanted. It would put Iowa in the same bracket as most other states on this issue.
Perhaps we could expect a fully-fledged anti-sweeps law to be introduced next year, like those which have passed into law in Indiana and Maine this year. We’re also waiting to see if Tennessee’s Governor will sign an anti-sweeps bill into law there.
We’ll keep an eye on this story in IA and update you as things progress.
Author: Jon Ridehalgh
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