Iowa Legalizes Sports Betting
Iowa has become the third state this year and the most recent to legalize sports betting. On Monday, Governor Kim Reynolds signed a sports betting bill into law. The bill that Reynolds signed, SF 617, passed through the legislature last month and has been on her desk for a week.
Iowa has more casinos than most states in the country, despite its small population of just over three million people. The new sports betting bill allows for sports betting at each one of Iowa’s 19 casinos. The goal is for brick-and-mortar sportsbooks to be operational before the start of the upcoming NFL season.
In regards to mobile betting, there is both good news and bad news for residents of Iowa. Mobile and online betting are allowed under the bill, although, there will be an in-person requirement until January 1, 2021.
Iowa has been strongly considering sports betting since 2018 when the PASPA ruling was overturned. There have been a number of bills to go through Iowa, so it only seemed like a matter of time before one was chosen.
The Iowa Racing and Gaming Commission will act as the regulatory body.
The market in Iowa will be smaller than other states like New Jersey or Pennsylvania. But it should see significant action from bordering states like Minnesota and Nebraska. Experts believe that Iowa could eventually see more than $4 billion in annual sports betting handle. The money will be allocated to the General Fund as well as the Sports Wagering Receipts Fund.
State Needs More Revenue
Iowa is in need of sports betting to help build casino revenue in the state. Across the country, commercial casino revenue was up over 3% in 2018 compared to 2017. However, in Iowa that revenue only increased 0.3% in that span. Sports betting itself won’t be the biggest form of revenue for the casinos. But the increased traffic in the casinos from sports betting will lead to other forms of revenue (food & beverage, slots, table games, etc.).
Other key aspects of Iowa’s sports betting law: The tax rate will be 7.5 percent (6.75 percent state tax). The application fee is $45,000 with a $10,000 annual renewal. Betting on collegiate sports will be allowed, however, not college prop bets. No “integrity fee” and no “official league data” mandate.
The bill passed in the Iowa Senate 31-18 and then a week later in the House 67-31. Under the bill, sports betting can begin on July 4. Brian Ohorilko, administrator of the Iowa Racing and Gaming Commission, has said that it will likely take longer for them to establish the rules for sports betting.
According to Ohorilko, the earliest that Iowa will see sports betting “would be the end of July, or more likely, August.”
Iowa casinos have already begun to form partnerships, even as early as January of this year. Look for both FanDuel and DraftKings to enter the Iowa market. FanDuel has partnered with Boyd Gaming, and DraftKings with Caesars, both of which own multiple properties in the state.