Iowa lottery, casinos, racetracks all want to have sports betting

Lawmaker Says Everyone Is ‘All In’ For Legalizing Iowa Sports Betting Next Year

Iowa sports betting

Gambling interests in Iowa are gearing up for another push to legalize sports betting.

Leading the charge is Rep. Jake Highfill, who says the issue has remained in focus for his colleagues during recent weeks.

“They’re all in,” Highfill recently told The Gazette. The young Republican was behind a promising 2018 bill that would have legalized Iowa sports betting at casinos and racetracks pending a favorable ruling from the US Supreme Court.

That ruling came in mid-May, a week too late for lawmakers to do anything about it. The legislature had already adjourned without acting on the bill, so the next steps will have to wait until next year.

The conversation seems to be marching forward with a purpose in the off-season, though.

New Iowa sports betting chatter

When sports betting bills reappear next year, they’ll have additional support from the Iowa Lottery.

Last month, board members met to consider the agency’s role in the industry, if any. According to Vice President Mary Neubauer, several large retailers have expressed interest in offering at least a limited sports betting product.

The board unanimously approved a motion to explore sports betting more fully with vendors and lawmakers.

Dialogue is escalating among casino operators, too. Wes Ehrecke, CEO of the Iowa Gaming Association, said there has been “a lot more awareness” since the SCOTUS ruling. The IGA is a key supporter of legalization, favoring Highfill’s bill as written.

All in all, it sounds like the appetite for sports betting is mounting despite the legislative recess. That seemed to be the case during session too, though.

Iowa missed the boat in 2018

Many folks had Iowa on their watch list as a prime candidate to legalize sports betting following the SCOTUS ruling. The legislature had left the capital, but there were rumors of a possible special session over the summer. That likely won’t come to pass, but lawmakers did get a decent jump on the topic.

The relevant Iowa sports betting bill was introduced in late February, quickly clearing its first subcommittee stop. A study bill had preceded it one month prior.

The bill seemed to gain decent traction in the statehouse, and Highfill proclaimed bipartisan support across both the House and Senate throughout the spring. Casino groups offered their backing, too, and the lottery will now join the chorus if it’s allowed to participate.

Not everyone is on board, of course.

The primary resistance comes from churches, problem gambling organizations and, most notably, the NBA and Major League Baseball. The 2018 bill did not include integrity fees and other concessions they’re seeking.

Progress ultimately evaporated when the legislature adjourned on May 5. Lawmakers worked well past their April 17 deadline but failed to reach a vote on sports betting in either chamber.

What was in the bill?

As filed, H 2448 would have permitted sports betting at the state’s 19 casinos, horse racing tracks, and other “gambling structure(s).” It’s not exactly clear if that language included retail outlets, an implementation the state lottery will push for next year.

The bill would have allowed for betting on both professional and collegiate sports, both in-person and via electronic platforms. Casinos would pay $25,000 for a sports betting license, then a $15,000 renewal each year. The proposed tax was convoluted, essentially maxing out around 22 percent of revenue.

Highfill projected that Iowa would earn “tens of millions” from sports betting annually, while the lottery’s research forecasts a maximum of $10 million.

Iowa bills don’t carry over to odd-numbered years, so lawmakers will have to start over from introduction. Highfill maintains that there’s enough support in both chambers to proceed quickly in 2019.

State lotteries lining up for sports betting

Lotteries in a few states have worked to make sure they’re not being left behind in the conversation. In places where the agency regulates casino gambling, it makes some sense to add sports betting to their tasks.

Delaware is on that list. As of last month, the DE Lottery administers Delaware sports betting at the state’s three racinos. All three use the same partnerships with Scientific Games and William Hill US to manage their lines and betting activity, and the state keeps 50 percent of revenue. That’s the largest share of any of the involved parties.

It’s not the largest share in the country, though.

That honor will go to Rhode Island when it enters the market later this year. Under a single partnership with IGT, the RI Lottery will provide sports betting at the two Twin River casinos. The state will keep 51 percent of Rhode Island sports betting revenue, one of the highest in the world.

The West Virginia Lottery will take a less-invasive approach to regulating WV sports betting. It will allow the five casinos to craft independent partnerships and operate their own platforms, taxing revenue at a reasonable rate of ten percent. Target launch is on or before Sept. 1.

The Iowa Lottery doesn’t appear to be interested in playing a direct role in regulating sports betting at the moment. Instead, it’s seeking to make sure its retailers are included when lawmakers reconsider the framework.

Lottery outlets are not currently allowed to offer full sports betting in any state.

Eric Ramsey
- Eric is a reporter and writer covering regulated US gambling, sports betting, and DFS. He comes from a poker background, formerly on staff at PokerNews and the World Poker Tour.