The Iowa Senate has passed a bill legalising sports betting and daily fantasy sports (DFS) within the state.
The bill now heads to the Iowa House, where it is hoped it will be debated soon.
Senate approval of the bill was achieved via a 31-18 victory in the voting.
The proposal itself includes both land-based and online wagering, with betting being overseen by the state body which regulates greyhound and horseracing.
A revenue-based tax rate of 6.75% has been proposed – which is the same rate used in Nevada.
The bill would also legalise DFS betting, although a late change excluded DFS betting on college sports.
Senator Roby Smith said: "I believe what we’re doing in this bill is the right thing to do.
"Sports wagering will no longer be acceptable in the dark. The sun is shining and Iowans will be able to participate legally and responsibly."