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A distinct pattern emerged across US state legislatures this week: measured progress on gambling expansion alongside aggressive movement to restrict gray-market products including sweepstakes casinos and prediction platforms.
Lawmakers demonstrated increasing willingness to delay votes on iGaming and mobile betting while accelerating measures that redefine or prohibit unlicensed offerings, positioning 2026 as a regulatory consolidation year rather than an expansion cycle.
Gambling Expansion Advances With Guardrails
Illinois iGaming Framework Returns
Illinois Representative Edgar González Jr. reintroduced his online casino legislation, reviving last year’s framework with a 25% tax rate, multiple operator skins, and standard licensing requirements.
The proposal’s near-identical structure suggests sponsors view political timing, rather than policy design, as the primary obstacle. Illinois represents one of the largest untapped iGaming markets in the US, and González has previously characterized iGaming legalization as a multi-year legislative effort.
Virginia iGaming Moves Forward—With 2027 Timeline
Virginia’s House iGaming measure, HB 161, cleared a subcommittee and the House Committee on General Laws. However, an amendment requiring approval across two legislative sessions effectively delays any market launch until 2027 at the earliest.
The move appears to be a political compromise, allowing lawmakers to demonstrate progress while addressing concerns about lottery cannibalization, employment impacts, and responsible gambling frameworks. A Senate committee separately passed SB 118 after adding additional player protection measures.
Mississippi Mobile Sports Betting Passes House
Mississippi’s House approved mobile sports betting legislation for the third consecutive year, passing HB 1581 with strong bipartisan support. The bill directs the majority of new tax revenue to the state’s underfunded public pension system and allocates $6 million annually to offset potential losses at retail casino properties.
By framing mobile wagering as a public finance solution, Mississippi has broadened political support while directly addressing brick-and-mortar casino concerns about revenue cannibalization.
Alabama Constitutional Amendment Targets Comprehensive Expansion
Alabama Senator Merika Coleman-Evans introduced SB 257, a constitutional amendment that would allow voters to decide on a state lottery, commercial casinos, and online sports betting. The measure would establish a statewide regulator and create a pathway for tribal gaming compacts.
Because gambling expansion requires constitutional changes in Alabama, voters hold final authority. A comprehensive expansion package passed the House in 2024 but fell one vote short in the Senate, and it remains unclear whether lawmakers will revisit the issue during an election year.
Missouri Advances VLT Legalization With Gray-Market Restrictions
Missouri’s HB 2989 cleared a second committee this week, proposing to legalize video lottery terminals while tightening oversight of gray-market skill games. The bill adds disclosure requirements and enhanced licensing scrutiny to separate regulated VLTs from unlicensed alternatives.
Rather than implementing outright bans, Missouri is applying compliance pressure and tighter definitions to restrict the gray market—a regulatory approach other states may adopt.
Sweepstakes Casino Enforcement Intensifies
Mississippi Senate Unanimously Passes Sweepstakes Ban
Mississippi’s Senate unanimously approved SB 2104, expanding criminal statutes to cover online and computerized gambling-style games and explicitly targeting sweepstakes casino platforms.
The legislation shifts sweepstakes enforcement from regulatory ambiguity to statutory prohibition, simplifying enforcement for regulators, law enforcement, and payment processors.
Mississippi now faces a familiar split: the House is advancing mobile sports betting while the Senate prioritizes sweepstakes enforcement. A similar division stalled both efforts last year, though growing national bans and the emergence of prediction markets could push lawmakers toward compromise this session.
Iowa Strengthens Enforcement Authority
Iowa’s House Study Bill 586 and Senate Study Bill 3040 both cleared subcommittees. Rather than defining sweepstakes casinos specifically, the proposals expand regulators’ authority to pursue unlicensed gambling broadly through injunctions and cease-and-desist orders.
This approach avoids legal gray areas by strengthening enforcement tools rather than debating product definitions. Both measures have support from the state gaming regulator, improving passage prospects.
Oklahoma Opens Session With Sweepstakes Target
Oklahoma lawmakers opened the legislative session with SB 1589, targeting dual-currency sweepstakes casino models. The bill redefines what constitutes “representative of value” to include virtual coins used on sweepstakes platforms.
Oklahoma joins a growing number of states explicitly labeling dual-currency systems as illegal under state gambling statutes.
Maryland Holds Hearings on Regulatory Gaps
The Maryland House Ways and Means Committee held a hearing on HB 295, which would prohibit interactive games using multi-currency payment systems. Similar to last week’s Senate committee hearing on companion bill SB 112, lawmakers heard testimony from commercial casino operators and sweepstakes representatives but took no action.
Maryland legislators appear divided on whether prohibition or regulation represents the appropriate path for sweepstakes casinos. Additional hearings are expected before a legislative direction is established.
In 2025, the Maryland Senate passed a ban bill that died in the House when the session adjourned before a vote could occur.
Prediction Markets Face Legislative Scrutiny
Multiple states advanced or introduced legislation this week targeting federally regulated but politically contested prediction markets.
Hawaii Moves to Classify Event Contracts as Gambling
Hawaii lawmakers introduced multiple gambling bills last week, and HB 2198, which would explicitly classify prediction markets as gambling, received an early hearing. The House Committee on Consumer Protection and Commerce unanimously advanced the measure, which has 16 co-sponsors.
Hawaii is one of only two states without any regulated gambling, alongside Utah. Lawmakers stated the bill would close a loophole allowing prediction markets to offer contracts resembling sports betting.
Connecticut Seeks Age Restrictions for Prediction Platforms
Governor Ned Lamont introduced legislation prohibiting access to prediction markets and advertising to consumers under 21.
Rather than implementing outright bans, Connecticut is employing consumer protection rules—a potentially easier political path that still limits market growth.
Illinois Proposes Sports Event Contract Ban
In addition to reintroducing iGaming legislation, Representative González Jr. introduced HB 5059, which would prohibit the sale of sports event contracts, establish a minimum age of 21, and impose additional responsible gaming safeguards.
Illinois is pursuing a dual-track approach: expand regulated iGaming while restricting unlicensed or lightly regulated alternatives.
Industry Outlook
This week reinforced clear legislative trends: gambling expansion remains incremental and cautious, sweepstakes enforcement is accelerating, and prediction markets face growing regulatory pressure.
States demonstrate greater comfort implementing enforcement measures first while taking measured approaches to legalization. For operators, the regulatory environment signals that licensed markets may grow slowly, but tolerance for gray-market products is contracting rapidly.
That dynamic is expected to define the remainder of the 2026 legislative session.
Source: Yogonet
