A familiar split-screen played out in state legislatures this week: proposals to expand gambling to boost tax revenue in some states, while others moved to tighten enforcement of gray-market products like sweepstakes casinos and sports-event contracts.
Lawmakers appear increasingly comfortable delaying votes on iGaming or mobile betting, while fast-tracking measures that redefine or outright prohibit unlicensed products.
In short, 2026 is shaping up to be more of a cleanup year than an expansion year.
Gambling Expansion Bills Move Forward — But With Delays And Guardrails
Illinois iGaming Proposal Returns
Illinois Rep. Edgar González Jr. has reintroduced his online casino bill, effectively reviving last year’s stalled framework. The proposal again calls for a regulated iGaming market with a 25% tax rate, multiple skins per operator, and standard licensing and responsible gambling requirements.
Why It Matters:
Illinois remains one of the largest untapped iGaming markets. The framework’s near-identical structure suggests sponsors believe political timing — not policy design — was the problem last year. González has previously described iGaming as a multi-year effort.
Still, with budget pressures mounting and offshore competition persistent, the same framework could gain traction in 2026.
Virginia iGaming Advances — But Realistically Delayed Until 2027
Virginia’s House iGaming measure, HB 161, advanced through a subcommittee and the House Committee on General Laws this week. However, an amendment requiring approval across two legislative sessions effectively pushes any launch to 2027 at the earliest.
Why It Matters:
This appears to be a political compromise. Lawmakers can show progress while buying time to address concerns about lottery cannibalization, labor impacts, and responsible gambling. It signals interest — not urgency.
Meanwhile, a Senate committee passed a separate iGaming bill, SB 118, after adding additional responsible gaming safeguards.
Mississippi Mobile Sports Betting Clears The House Again
Mississippi’s House passed mobile sports betting for the third straight year, approving HB 1581 with strong support. The bill directs most new tax revenue toward the state’s underfunded public pension system and sets aside $6 million annually to offset potential retail casino losses.
Why It Matters:
Mississippi is framing mobile wagering as a public finance solution, not just a gaming expansion. Tying revenue to pensions broadens political support while acknowledging cannibalization fears from brick-and-mortar casinos.
Alabama Pushes Constitutional Amendment For Lottery, Casinos, And Online Betting
Alabama Sen. Merika Coleman-Evans introduced SB 257, a constitutional amendment that would let voters decide on a lottery, commercial casinos, and online sports betting, while creating a statewide regulator and opening the door to a tribal compact.
Why It Matters:
Because gambling expansion requires constitutional changes in Alabama, voters ultimately decide. That means the proposal must survive both legislative negotiations and a statewide campaign.
What to Watch for:
A comprehensive expansion package passed the House in 2024 but fell one vote short in the Senate. With lawmakers facing an election year, it remains unclear whether there is an appetite to revisit the issue.
Missouri Targets VLT Legalization And Gray-Area Machines
Missouri’s HB 2989 advanced through a second committee this week. The measure would legalize video lottery terminals while tightening oversight around so-called “skill” or gray-market devices. The bill adds disclosure requirements and increased licensing scrutiny to separate regulated VLTs from unlicensed alternatives.
Why It Matters:
Rather than just banning skill games outright, Missouri is applying compliance pressure and tighter definitions to squeeze the gray market — a regulatory tactic that other states may copy.
Sweepstakes Casinos Face Intensifying Crackdowns
Mississippi Senate Passes Sweepstakes Ban
Mississippi’s Senate unanimously passed SB 2104, expanding criminal statutes to cover online and computerized gambling-style games and explicitly targeting sweepstakes casino platforms.
Why It Matters:
This shifts sweepstakes enforcement from regulatory ambiguity to clear statutory illegality, making it easier for regulators, law enforcement, and payment providers to act.
What to Watch for:
Mississippi could again see chambers prioritize different goals. The House is advancing mobile sports betting while the Senate focuses on sweepstakes enforcement. A similar split last year stalled both efforts, though growing national bans and the rise of prediction markets could pressure lawmakers to reach a compromise this session.
Iowa Advances Enforcement Bills
Iowa’s House Study Bill 586 and Senate Study Bill 3040 both cleared subcommittees. Instead of defining sweepstakes casinos, the proposals strengthen regulators’ authority to pursue “unlicensed gambling” broadly through injunctions and cease-and-desist orders.
Why It Matters:
This approach avoids legal gray areas by expanding enforcement tools rather than debating product definitions. Both measures are backed by the state gaming regulator, improving their chances of passage.
Oklahoma Opens Session With Sweeps Ban Effort
Oklahoma lawmakers began the session with a bill targeting dual-currency sweepstakes casino models. SB 1589 redefines what counts as “representative of value” to include virtual coins used on sweepstakes platforms.
Why It Matters:
Oklahoma is the latest state to target sweepstakes casinos and explicitly labels dual-currency systems as illegal under state statutes.
Maryland Hearings Highlight Regulatory Gaps
The Maryland House Ways and Means Committee held a hearing on HB 295, which would prohibit “interactive games” that use multi-currency payment systems.
Similar to the Senate committee hearing on the companion bill last week, SB 112, lawmakers heard arguments from commercial casino operators and sweepstakes representatives but did not vote.
Why It Matters:
Maryland lawmakers appear unsure whether a prohibition or regulation is the way forward for sweepstakes casinos. More hearings will likely occur before a path forward is chosen.
In 2025, the Maryland Senate passed a ban bill, but it died in the House after it ran out of time before the session adjourned.
Prediction Markets Enter Lawmakers’ Crosshairs
More states this week advanced or introduced legislation targeting the federally regulated — but highly contested — prediction markets.
Hawaii Moves To Classify Event Contracts As Gambling
Hawaii lawmakers introduced multiple gambling bills last week, and among the first to receive a hearing was HB 2198, which would explicitly classify prediction markets as gambling. The House Committee on Consumer Protection and Commerce unanimously advanced the measure, which notably has 16 co-sponsors.
Why It Matters:
Hawaii is one of only two states without any regulated gambling, alongside Utah. Lawmakers say the bill would close a loophole that allows prediction markets to offer contracts resembling sports betting.
Connecticut Seeks Age Restrictions For Prediction Platforms
Gov. Ned Lamont introduced legislation prohibiting access to prediction markets and advertising to consumers under 21.
Why It Matters:
Rather than banning the products outright, Connecticut is using consumer protection rules —a potentially easier political path that still limits market growth.
Illinois Proposes Sports Event Contract Ban
In addition to introducing iGaming legislation, González Jr. introduced HB 5059, which would prohibit the sale of sports event contracts, set a minimum age of 21, and impose additional responsible gaming safeguards.
Why It Matters:
Illinois is pursuing a two-track approach: expand regulated iGaming while boxing out unlicensed or lightly regulated alternatives.
The Big Picture
This week reinforced a clear legislative trend:
States appear more comfortable cracking down first and legalizing later. For operators, the message is straightforward: licensed markets may grow slowly, but tolerance for the gray market is shrinking fast.
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