Sports Betting Is All The Rage In The Midwest: New Bills Pop Up In Illinois, Iowa, Missouri

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Correction: The tax rate for the Iowa sports betting bill was inaccurately described in the initial version of this story.

Three different sports betting bills surfaced in the Midwest this week, demonstrating the quickening pace with which legislatures are looking to address the issue of single-game wagering.

The new legislation appeared in Illinois, Missouri and Iowa, three gaming states that could all generate significant revenue directly from sports betting while also creating a new tool to drive customers to their gaming facilities.

All three bills, if enacted, would take effect if New Jersey prevails in its US Supreme Court case to strike down the federal ban.

A sports betting “integrity fee” — a portion of all wagers that would be payable to sports leagues — advanced by the NBA did not appear in any of these bills.

The Illinois sports betting bill

The bill in Illinois — S 2478 — is called the “Sports Betting Consumer Protection Act.” Its author is Sen. Don Harmon, who is the president pro tempore of the Senate.

What does the bill do? It sets up a basis for legalization and regulation of sports wagering in the state — or its possible prohibition — although it does not name which state agency would be in charge:

“Unless prohibited under federal law and as otherwise provided by State law, the Board may adopt rules which prohibit or authorize sports betting or electronic sports betting by an electronic sports betting patron or sports betting facility patron through an electronic sports betting account on an electronic sports betting platform or other means with an electronic sports betting licensee or sports betting facility licensee. The Board may require reporting of sports betting adjusted gross receipts to it by electronic sports betting licensees or sports betting facility licensees.”

The bill allows for the possibility of land-based sports betting as well as online and mobile wagering in the state. The legislation sets up no licensing fees or tax rates on sports wagering, leaving that up to future regulations.

The bill erroneously tries to capture the potential legal US sports betting market: “Industry experts estimate that a licensed sports betting market in the United States will have revenues of between $175,000,000,000 and $225,000,000,000 annually.”

Handle in the US may end up being around $200 billion if sports betting is widely legalized. Actual revenue in the US will be a fraction of that figure; hold is generally around five percent of wagers.

Earlier this month, a bill had been introduced in the House. But it still has not been filled in with any specific language.

The Iowa sports betting bill

Iowa’s new sports betting bill was introduced on Tuesday by a subcommittee that includes Rep. Ken Rizer. It’s no surprise to see the Hawkeye State join the movement.

Late last year, Iowa Gaming Association president Wes Ehrecke expressed his approval of sports betting. “To have it here, I believe will be a positive,” he told WHOTV. Ehrecke is not alone, either.

Cedar Rapids mayor Ron Corbett is running for governor this year, and he’s been vocal in his support of sports betting, too. Corbett ball-parked about $20 million in expected annual revenue, which the state would use to fund mental health care. He indicated that the industry could be managed by either the casinos or the lottery program.

Lawmakers appear to be starting down the former path. H 592 would allow the state’s licensed casinos and horse racing tracks to accept sports wagers. The bill also allows “any system of wagering as authorized by the commission,” appearing to include mobile betting:

“The commission may authorize a gambling game licensee to conduct advance deposit sports betting wagering An advance deposit sports betting wager may be placed in person on a licensed excursion gambling boat, licensed gambling structure, or in a licensed racetrack enclosure, or from any other location via a telephone-type device or any other electronic means.

The calculation of tax on sports betting revenue is a bit convoluted. The wording of the bill as written appears to tax a portion of handle at a very high rate.

According to lobbyist declarations, the NBA and Major League Baseball are opposed to the bill as written.

The Missouri sports betting bill

None of the previous gossip seemed to indicate Missouri was imminently going to move on sports betting. On Tuesday, though, Rep. Bart Korman introduced the state’s first piece of legislation on the topic.

H 2320 is very brief, devoid of any language regarding licensing or fees. It does, however, have one eye-opening section:

The gaming commission may authorize a person who is licensed to operate excursion gambling boats or licensed to operate fantasy sports contests to conduct sports wagering.

In addition to allowing casino boats to conduct sports wagering, Korman’s bill would extend that permission to daily fantasy sports operators. It would also allow the state lottery to launch games based on sporting events.

Missouri legalized DFS in 2016. Since then, five companies have applied for a fantasy sports license.

Each of those operators pays a maximum of $10,000 annually plus a tax rate of 11.5 percent on revenue. The state has yet to set the rates for sports betting operations.

Missouri also has 13 riverboat casinos operated by six groups:

Under the proposal, those 11 entities appear to be the ones allowed to accept wagers, as the bill is written. No sports betting law will take effect until there is resolution at the federal level.

Eric Ramsey contributed to this report.