Iowa Looking Increasingly Likely to Legalize Sports Betting in 2019

A wide range of lawmakers and gaming interests in Iowa are reportedly on the same page when it comes to legalizing and regulating sports betting. Democrats and Republicans, the Iowa lottery, local casinos and retailers are all interested in bringing legal sports betting to the state.

Local news outlet The Gazette reported yesterday that Representative Jake Highfill out of Johnston said lawmakers on both sides of the aisle are “all in” on figuring out how the state can best legalize and regulate sports betting in Iowa.

With lawmakers and stakeholders all interested in seeing legislative action on sports betting, it’s beginning to look likely that the issue will be taken up when the legislature convenes again in January.

Iowa Casinos Interested in Legislation and Mobile Betting

The Iowa Gaming Association (IGA) is also interested in bringing sports betting to local casinos. As the Gazette reported yesterday, the association would like to see lawmakers approve sports betting at casinos as well as through mobile platforms that would allow residents across the state to bet on pro and college sports.

Last year, the Iowa Gaming Association expressed support of legalization even before the Supreme Court had made its decision in the New Jersey sports betting case. At the time, IGA President Wes Ehrecke said that although support of sports betting seemed to be mixed, the fact is sports betting is already happening. The state, he argued, might as well regulate and tax it.

The Supreme Court did indeed rule in favor of New Jersey, striking down the Professional and Amateur Sports Protection Act (PASPA) as unconstitutional. That decision has now cleared the way for Iowa and other states to regulate sports betting as they see fit.

Iowa Lottery and Retailers Looking at Sports Betting

Lottery officials held a meeting last month to discuss sports betting that resulted in the five-member board directing lottery staff to explore the feasibility of allowing lottery retailers to offer sports betting to customers. During that meeting, officials also discussed what sports betting could look like if offered by the lottery.

Iowa Lottery Spokeswoman Mary Neubauer explained last month that the lottery board has been contacted by major retailers of lottery tickets that are interested in getting in on the action if sports betting is legalized in Iowa:

“Just like lottery tickets are sold in grocery stores, convenience stores, you know, other locations around the state, they would want the option of adding sports betting or sports lottery to the selections that they have.”

Neubauer said the lottery has not made any final decisions yet, but is interested in getting the conversation started so the lottery can be ready to go if the legislature decides to legalize sports betting in Iowa.

Iowa Governor Kim Reynolds came out a few days later saying she supports the lottery looking into the issue. She said she hasn’t taken a firm stance on either side of the issue, but believes it is a good idea for the lottery to consider its options ahead of potential legalization:

“It’s okay for them to look into it. That is what I’m saying. I think the different agencies will be looking at that. I’m sure legislators will have questions, so that’s just an opportunity for them to be prepared for that. I’m not advocating one way or the other. So, I’ve said that we’ll work with the legislators and we’ll see what that looks like next session.”

Legislation Appears Likely in 2019

Iowa attempted to pass a sports betting bill in 2018 that would have legalized sports betting for people 21 or older at licensed casinos as well as via electronic means. House File 2448 called for licensed casinos to apply for sports betting licenses at a cost of $25,000 plus a $15,000 annual renewal fee.

The bill also called for a 5% tax rate on the first $1 million of revenue and a 10% tax rate on the next $2 million. The bill failed to get the support it needed in the House before being sent over to the Senate.

In yesterday’s report, The Gazette explained that the IGA (which supported last year’s bill) is planning to meet with legislators this summer to discuss the pros and cons of legalization. The IGA also plans to discuss tax rates with the aim being to keep taxes low enough that licensed providers in Iowa will be able to compete with unlicensed offshore betting sites and tribal casinos that do not face similar tax burdens.

Although nothing is guaranteed at this early stage, it is beginning to look like legislation will be introduced again in 2019. The odds look even better this time around with lawmakers, casinos and the state lottery all expressing interest in legalization. Governor Reynolds also seems open to the idea.

If these various groups can iron out all the details and ensure everyone is on the same page regarding how legalization will look, Iowa is likely to get something done on this issue in short order.