IPTV is a recognised, standardised method of delivering television over an internet connection rather than a satellite dish or cable line. The ITU-T has published IPTV standards for exactly this purpose, and the major streaming services you already use every day rely on the same underlying delivery approach. The technology itself is not a legal grey area any more than streaming a video over the internet in general is.
What the real legal question actually is
The question that matters is not "is IPTV legal" but "does this specific provider have the rights to the specific content it carries." That is a licensing question about content, and it applies to every form of television and streaming, not something unique to IPTV. A cable company can carry unlicensed content just as a streaming app can; the delivery mechanism does not determine whether the underlying broadcast rights were properly obtained.
Why this varies between providers
Because the technology is open and the barrier to running an IPTV service is low, the provider landscape includes everything from properly licensed operators to services carrying content without the rights to do so. This is also true of the wider broadcast and streaming industry generally, but the fragmented nature of IPTV makes it harder for an individual subscriber to verify licensing the way you could with a single well-known cable company.
What you can reasonably evaluate as a customer
You are not in a position to audit a provider's content licensing directly, but you can look at the same signals that correlate with a more credible operation generally: a provider that answers questions honestly rather than evasively, does not make implausible claims about its channel count, and has a real, responsive support channel. The guide to choosing an IPTV provider covers these signals in more depth.
Regional blackouts are a separate issue
Some sports and events are subject to regional blackout restrictions imposed by the rights holders themselves, not by any individual provider's choice. If a specific match or event is unavailable in your region on a given day, that is frequently a rights-holder restriction rather than a sign of anything wrong with the service — see how PPV and live events work on IPTV for more on how this plays out in practice.
Our position
We are not positioned to give you specific legal advice for your jurisdiction, and this article is general information rather than that. What we can tell you plainly is that we answer questions about our own service honestly, including the ones that are uncomfortable, and we would rather you ask before subscribing than be surprised afterwards.