Although a few states left the iGaming and mobile betting measures afloat, most are placing obstacles or adding time delays and constitutional barriers. On the other hand, several legislatures have ramped up their attempts to stop sweepstakes casinos and prediction-style betting operations outside established regulated processes.
Expansion Bills Remain on the Table, But Momentum is Limited
In Illinois, legislators are having another go. Rep. Edgar González Jr. re-submitted his online casinos bill, which looks practically identical to the one introduced last year. It has a tax rate of 25%, and multiple brands are included. The lawmakers believe the concept is a great one, but the timing was poor. That being said, there isn’t any pressing need, as Illinois is one of the largest untapped markets.
Virginia is moving even more cautiously with the legislators driving an iGaming bill through committees, adding a provision to require it to pass in two sessions. This means that they won’t be able to roll it out until at least 2027. That allows lawmakers to demonstrate progress while delaying decisions about money from the lottery, jobs, and consumer protection.
In Mississippi, the House has once again passed mobile sports betting. They are trying to promote it as a budget fix, and the funds are to be allocated to public pensions, with some earmarked as protection for land-based casinos. This, however, has always been the major hurdle, as the Senate has always opposed such bills.
The slowest path is that of Alabama. A proposed amendment to their constitution allows the citizens to vote on a lottery, casinos, and gambling online. Although this still keeps the option alive, much debate and political maneuvering must precede a public vote.
States Turn from Debate to Definition on Gray-Market Games
While expansion slowed, enforcement accelerated. Several states moved decisively to redefine or eliminate legal ambiguity around sweepstakes-style gambling.
Mississippi’s Senate unanimously passed legislation explicitly banning online sweepstakes casinos by expanding criminal definitions of illegal gambling. This shift removes interpretive gray areas and simplifies enforcement for regulators, payment processors, and law enforcement.
Iowa adopted a different strategy. Instead of defining sweepstakes products, lawmakers strengthened regulators’ authority to pursue unlicensed gambling broadly, relying on injunctions and cease-and-desist powers rather than product-specific bans.
Oklahoma followed suit by targeting dual-currency models, redefining virtual coins as items of value under state law. The move aligns Oklahoma with a growing list of states treating sweepstakes mechanics as statutory violations rather than regulatory edge cases.
In Missouri, lawmakers advanced a bill legalizing video lottery terminals while tightening oversight of “skill” machines. Rather than an outright ban, the approach uses licensing and disclosure pressure to marginalize gray-market devices.
States Focus on Gray-Market Games
While expansion bills were taking their time, most states were acting quickly on enforcement measures. The main objective, however, was to eliminate the gray area on sweepstakes-style gaming.
In Mississippi, it has been reported that the Senate unanimously approved a bill banning online sweepstakes casinos by expanding the criminal definition of illegal gambling. This will make the enforcement process easier for regulators, law enforcers, and online payment processors.
In contrast, Iowa opted for a broader strategy. Instead of advocating for anti-sweepstakes casino legislation, lawmakers introduced bills that provide authorities with more power to combat illegal gambling in the state. Injunctions and cease-and-desist orders are among the punitive measures.
In the case of the state of Oklahoma, lawmakers specifically targeted the common sweepstakes two-currency system. This definition of virtual coins as having value under the law further supports the illegality of the models.
Missouri concentrated on the machines. Politicians introduced a bill to legalize video lottery terminals while also cracking down on “skill” or gray-market games. Instead of cutting off these games totally, it is a strategy of squeezing them with stricter licensing and disclosure provisions.
Prediction Markets Draw New Attention from Lawmakers
Prediction betting platforms were similarly targeted. Hawaii, which does not have any regulated form of gaming, made a move to classify event-based contracts as gambling itself. The bill drew fast committee support, indicating that lawmakers are uncomfortable with the federally regulated product that resembles sports betting.
Connecticut decided to support consumer protection measures, proposing age limitations and advertising prohibitions rather than a ban. Illinois has followed a similar approach by taking a parallel path to iGaming expansion and proposing a ban on contracts for sporting events.
What This Means for the Market
The legislative takeaway is the same throughout states: regulators are putting a premium on control over growth. Lawmakers seem keener now to clamp down on unlicensed or lightly regulated products and revisit expansion later, once boundaries are clearly enforced.
For operators licensed, this is a signal of slower but steadier development of the market. Regarding the sweepstakes and prediction platforms, tolerance is shrinking fast. The most defining feature of the session of 2026 is not how many new markets open up but how fast gray areas are getting closed.
