Iowa State Law Complete

SKILL: Iowa State Law — Complete Reference

Version: 1.0.0 | Domain: Iowa Gambling, Corporate, Money Transmission, Data Privacy, Tax

Iowa Gambling Law

Iowa Code Chapter 99B — Games, Amusements, and Contests

§99B.1 — Definitions

• "Game of skill": an activity in which the outcome is determined predominantly by the skill of the participants
• "Game of chance": an activity in which the outcome is determined predominantly by chance
• "Contest": any competition between persons for prizes or recognition

§99B.5 — Contests of Skill — EXPLICITLY LEGAL

• §99B.5(1): Contests of skill are lawful in Iowa
• §99B.5(2): Contests of skill may offer prizes. Registration required with the Iowa Department of Inspections and Appeals (DIA) if prize value exceeds $500 in a single contest
• §99B.5(3): Entry fees ARE permitted for contests of skill
• Iowa DIA registration: file with Iowa Department of Inspections and Appeals, Lucas State Office Building, Des Moines, IA 50319; www.dia.iowa.gov
• Iowa has NOT passed specific DFS legislation — DFS operates under §99B's general skill-game provisions

§99B.6 — Promotional Contests

• Businesses may conduct promotional contests without a license IF:
  • No purchase is necessary to enter (no consideration)
  • Prizes are predetermined
• Relevant if building a free-to-play marketing sweepstakes layer

Key statutory distinction:

• Skill → Chapter 99B (legal with registration)
• Chance → Chapter 99F (illegal without IRGC license)

Iowa Code Chapter 99F — Gambling

§99F.1(16) — "Gambling game" means any game of chance. The definition expressly includes: slot machines, roulette, keno, and any other game where outcome is substantially determined by chance.

§99F.3 — Iowa Racing and Gaming Commission (IRGC) regulates ALL gambling in Iowa. Commission contact: www.iowa.gov/irgc; 1300 Des Moines St., Des Moines, IA 50309.

§99F.9 — Only licensed casinos (Class A, B, C, or D licenses) may operate gambling games. Operating an unlicensed gambling game = criminal violation.

§99F.12 — Criminal penalties for unlicensed gambling: Class D felony (up to 5 years imprisonment, up to $7,500 fine).

Prediction markets with chance elements: If a prediction market outcome is substantially determined by chance → regulated as gambling under 99F. Must have IRGC license. Do NOT operate without one.

Iowa Code Chapter 99G — Iowa Lottery

• §99G.1 through §99G.42: Iowa Lottery Authority operations
• Lottery = three elements: consideration + chance + prize
• If your contest has all three → lottery → illegal unless you're the Iowa Lottery Authority
• Remove ONE element: (a) no purchase required (no consideration), (b) skill determines outcome (no chance), or (c) no monetary prize → breaks the lottery definition

Iowa Code Chapter 99E — Pari-Mutuel Wagering

• §99E.1 through §99E.32: covers horse and greyhound racing
• Pari-mutuel = pooled bets, odds determined by relative amount bet on each outcome
• Not directly applicable to AI competitions or prediction markets
• However: regulators may try to analogize a prediction market to pari-mutuel wagering (pooled bets on outcomes). Study the structure to anticipate and rebut this argument.

Iowa Sports Betting (Added 2019 — SF 617)

• Iowa legalized sports betting via Senate File 617 (2019), amending Chapter 99F
• §99F.4D — Sports wagering authorized at licensed casinos and via mobile apps
• §99F.4D(2) — License required from IRGC (only entities affiliated with a licensed casino may receive this license)
• §99F.4D(8) — "Sporting event" defined as professional or collegiate athletic events
  • Does NOT include: prediction markets, AI competitions, esports (as of current statute)
• Mobile sports betting: geo-fenced to Iowa's borders. Operators must verify user is physically in Iowa.
• Implication: Iowa's sports betting law is narrowly written. AI competitions and prediction markets don't fall under it — they fall under 99B (skill) or 99F (chance).

Iowa Money Transmission Law

Iowa Code Chapter 533C — Iowa Uniform Money Services Act

§533C.102 — Definitions

• "Money transmission" means: (i) selling or issuing payment instruments, (ii) selling or issuing stored value, or (iii) receiving money or monetary value for transmission
• Broad definition — accepting funds from users and distributing them to winners likely qualifies

§533C.201 — License Required

• Any person engaged in money transmission in Iowa must hold a license issued by the Iowa Superintendent of Banking
• Iowa Division of Banking: www.idob.iowa.gov; 200 E. Grand Ave., Suite 300, Des Moines, IA 50309

§533C.202 — License Application Requirements

• Surety bond: minimum $100,000 (Superintendent may require up to $500,000)
• Financial statements: audited or reviewed by CPA
• Background check: all principals and key individuals
• Business plan: describe money transmission activities
• Filing fee: $1,000 application fee

§533C.301 — Exemptions

• §533C.301(1): Banks, trust companies, savings associations — exempt
• §533C.301(2): Credit unions — exempt
• §533C.301(3): Agents of licensed money transmitters acting within scope of agency agreement — exempt (use this for payment processor partnerships)
• §533C.301(7): "A person that provides clearance or settlement services pursuant to a registration or exemption under federal securities law" — potentially relevant for certain crypto structures

Crypto/non-custodial question in Iowa:

• Iowa has NOT issued specific guidance on crypto-to-crypto transmission
• Iowa follows FinCEN federal guidance as a baseline
• Non-custodial platforms (user wallet → smart contract → user wallet, platform never controls funds): strongest argument for exemption from Iowa MTL
• This argument is NOT tested in Iowa courts — get an Iowa-specific legal opinion before relying on it

Iowa Corporate Law

Iowa Code Chapter 489 — Iowa Revised Uniform LLC Act

Formation:

• File Certificate of Organization with Iowa Secretary of State
• Fee: $50 (online filing)
• Filing: www.sos.iowa.gov
• Effective: upon filing (same day for online)

Operating Agreement:

• Not required to be filed, but MUST exist for proper governance
• Multi-member LLCs: always have a written operating agreement
• Single-member: still advisable for liability protection purposes

Series LLC:

• Iowa does NOT authorize series LLCs
• If you need series LLC structure (separate liability cells): use Delaware LLC or consider Nevada

Annual Report:

• Due: April 1 each year
• Fee: $60 for LLCs, $45 for corporations
• File with Iowa Secretary of State

Iowa Corporate Income Tax:

• Current rate (2026): 5.5% flat rate (Iowa significantly reformed its corporate tax structure, reducing from graduated rates of up to 9.8%)
• Source: Iowa Code §422.33

Iowa Individual Income Tax:

• Current rate (2026): 3.8% flat rate (reduced from prior graduated rates under Iowa's multi-year tax reform)
• Pass-through LLC income: taxed at Nick's individual rate
• Source: Iowa Code §422.5

Note: Iowa has no state-level capital gains preference — capital gains taxed as ordinary income at individual rates.

Iowa Consumer Protection

Iowa Code Chapter 714 — Fraud and Deception

§714.16 — Iowa Consumer Fraud Act

• Prohibits: "unfair practice, deception, fraud, false pretense, false promise, or misrepresentation, or the concealment, suppression, or omission of any material fact"
• Applies to: all consumer transactions, including digital products and platform services
• Enforcement: Iowa Attorney General has authority to investigate and sue; civil penalties up to $40,000 per violation
• Private right of action: YES — consumers can sue individually (unlike ICDPA)
• All marketing materials, TOS, pricing disclosures must comply

Iowa Data Privacy

Iowa Code Chapter 715D — Iowa Consumer Data Protection Act (ICDPA)

Effective: January 1, 2025

Threshold — Applies if:

• Controls/processes personal data of 100,000+ Iowa consumers annually, OR
• Controls/processes personal data of 25,000+ consumers AND derives more than 50% of gross revenue from sale of personal data

Consumer Rights:

• Right to access personal data
• Right to deletion
• Right to data portability
• Right to opt out of: targeted advertising, sale of personal data, profiling for significant decisions

No private right of action — Iowa AG enforcement only. AG may bring civil action; no individual lawsuits under ICDPA.

For Nick's platforms: If prediction market reaches 100K Iowa users, full ICDPA compliance required. Build data governance infrastructure early — it's much harder to retrofit.

Iowa-Specific Regulatory Recommendations

Iowa AG contact for voluntary compliance inquiries: www.iowaattorneygeneral.gov/for-consumers

This is legal research and intelligence, not legal advice. Consult qualified legal counsel before taking action.