Iowa gaming regulators hope to curb unlawful wagering platforms with proposed invoice

DES MOINES, Iowa (IOWA CAPITAL DISPATCH) – Proposed laws from a state company would give the Iowa Racing and Gaming Commission the authority to take motion towards unlicensed playing websites.

State officers stated if handed, the invoice would give the fee authority to situation stop and desist orders to the “bad actors” that rip-off Iowans for info, cash or run unregulated, offshore markets. The invoice has been filed by the Iowa Department of Inspections, Appeals and Licensing prematurely of the 2026 legislative session, which begins Jan. 12.

Tina Eick, the gaming fee’s administrator, stated underneath present regulation, the fee doesn’t have the “clear authority” to take motion towards anybody aside from the casinos and sports activities books that it at the moment licenses.

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

According to the most recent report from the American Gaming Association, Americans wager greater than $673 billion yearly in unlawful and unregulated playing markets. The unlawful market, based on the report, has grown 22% since 2022. The affiliation attributes the rise to the rise in iGaming, or on-line playing, unlawful sports activities betting and unregulated ability video games, or unofficial slot-like machines.

Unlicensed distributors additionally skirt state taxes. According to the affiliation’s report, the unlawful market results in an estimated lack of $15.3 billion, yearly, in state gaming tax income.

What does unlawful playing appear to be?

Eick stated the state encounters three foremost forms of unlawful playing.

The first type are corporations that spoof or faux to be a reputable enterprise to try to steal info. Eick stated these dangerous actors will normally have a web site handle that appears simply barely off from the on line casino or reputable enterprise they’re making an attempt to impersonate.

Online on line casino playing will not be authorized in Iowa, so Eick stated if a neighborhood on line casino is reaching out and promoting on-line video games, “that’s a fake.”

The second sort of dangerous actor is a web based on line casino operator promoting sweepstakes that provide a cashout in cryptocurrencies. Eick stated the fee receives complaints about these corporations as a result of when folks go to money out their winnings, they’re unable to obtain the cash.

Offshore sports activities betting corporations additionally pose an issue in Iowa, Eick stated. These corporations will not be licensed in Iowa and due to this fact wouldn’t have to observe the identical guidelines that licensed operators should observe. Eick stated this implies the offshore corporations provide wagers on “things that aren’t legal in Iowa” and lift “integrity concerns.”

By distinction, Eick stated the licensed market is regulated by the fee for the good thing about the state and for the individuals who take part within the video games.

“We have a strong regulatory system that ensures the games are fair,” Eick stated. “We hold those operators accountable – their information and their funds are secure, and then they have responsible gaming, self exclusion programs in place, and then we tax them. They pay their fair share of taxes to Iowa.”

The bill permits the fee to situation stop and desist orders and acquire injunctive reduction on events providing these unlicensed forms of playing.

Under present regulation, she stated the one factor the fee can actually say is “buyer beware” and encourage Iowans to test the web sites they’re on earlier than coming into private and monetary info.

Eick stated the fee often hears complaints from Iowans who’ve been scammed by some of these unlawful playing operations, which is why the fee desires to discover a answer.

“The bottom line is, illegal gaming undermines the public trust and puts Iowans at risk,” Eick stated.

Prediction markets nonetheless an unknown issue

Eick hopes the invoice may “clean up” a few of the easy exploitations taking place within the playing market, however there are some newer forms of on-line playing that will probably be harder to regulate.

One of these is sports activities prediction markets, which permit customers to commerce contracts primarily based on the long run results of real-world occasions. For instance, somewhat betting on whether or not the Cyclones will beat the Hawkeyes, customers can wager on whether or not or not the Cyclones will win. The identical sort of predictive markets have existed prior to now in matters similar to politics, however predictive markets have lately become more popular in sports activities betting.

In late December, the sports activities betting app FanDuel, launched its own prediction market platform. Kalshi and Crypto.com had been early adopters of the mannequin, and are regulated by the federal Commodity Futures Trading Commission, which permits the buying and selling to happen with out state licensing.

Lawsuits across the mannequin have cropped up in a number of states, and attorneys basic from 38 states, together with Iowa’s Brenna Bird, signed a friend of the court brief in a case between Kalshi and Maryland’s Lottery and Gaming Control Commission, arguing the prediction market mannequin “threatens the States’ longstanding ability to protect their citizens.”

Eick stated the questions the fee has on prediction markets have “some overlap” with the questions it has on the “clearly illegal” gaming markets.

“It lacks some of the consumer protections that we see in the regulated gaming industry that we currently have in Iowa,” Eick stated.

Eick stated the prefiled invoice will not be meant to control predictions markets in Iowa, as a result of that situation is “more complex.”

Eick stated she’s undecided the laws will get handed, however on the very least, the invoice is a “conversation starter” to seek out options that may maintain Iowans protected after they gamble.

“For the integrity of the industry, and so that Iowans don’t lose faith in the regulated and secure market, we need to do something about these other markets,” Eick stated.

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