Casinomeister News has been following this story for some time; in the latest developments the Iowa Racing and Gaming Commission submitted its report on online poker legalisation to the legislature, which will now consider same and probably debate the issue early next year.
The pros and cons have been discussed by Iowa lawmakers for some months, and the Commission was tasked with studying internet poker and briefing legislators, who felt they did not have sufficient information for a sensible debate.
Estimates of online poker players in Iowa vary widely. Projections from several models used in the Commission's research shows estimates from 34,500 up to 172,500.
I think similar initiatives in other states - Nevada and California for example - may ultimately be taken into consideration, too. And there's a federal proposal in Congress from Joe Barton of Texas, as well.
Edited to add a postscript about another internet-related initiative by the Iowa State Lottery:
The Iowa Lottery recently conducted a phone survey that asked Iowans for their opinion on a number of issues and initiatives. The poll included questions on two highly controversial measurers – lowering the age requirement to play lottery games from 21 to 18, and instituting new lottery games on the internet that would accept debit or credit cards as forms of payment.
This is only a poll at present - any moves in this direction will probably face fierce opposition in the state legislature.