Iowa Sports Betting Legislation Advances In Both Chambers

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Iowa sports betting

Iowa sports betting legislation advanced through the House State Government Committee late last week.

It joins a companion Senate bill as live for the final two months of the legislative session. Bills in Iowa die if they do not advance through a committee by March 8.

Both bills now head to the Ways and Means Committee, where taxes and fees will need to be approved before they reach the main chambers.

Where Iowa sports betting goes now

Sen. Roby Smith, who chairs the Senate State Government Committee that passed S 1168 last week, tells Legal Sports Report that he hopes to move the bill through Ways and Means in mid-March.

That would get it back up on the Senate floor in the next month or so. The Iowa legislative session runs to May 3.

“The plan was to get them through this first funnel, and now they are live until the end of the session,” Smith said. “We’ll continue to work on these for the month of March, continue to work with stakeholders, colleagues and citizens, and then get it passed through the floor.”

How IA sports betting would look

The bills authorize wagering on professional and collegiate sporting events at the state’s excursion gambling boats, racetracks and “gambling structures.” And that begged the question: what are gambling structures?

Smith explained:

“We have a couple riverboat casinos that can’t fit sports wagering on there without removing table games or slot machines. The Racing and Gaming Committee would be able to say they can put their sportsbook inside the hotel on land. It would still be at the 19 current casino properties, but it gives them a little more flexibility.”

Mobile and online wagering are permitted by the bills. The Senate bill requires in-person sign-up for a sports betting account, but only for the first 18 months.

Stakeholders from the riverboat casinos, horse racing industry, sports leagues and Iowa Lottery spoke at hearings last week. Representatives from the sports leagues were the only ones to oppose the bills, which don’t provide an integrity fee to the leagues or required use of official data.

No state lottery?

Smith mentioned the Iowa Lottery as a stakeholder. The lottery is conspicuously absent from those allowed to participate in Iowa sports betting under the legislation.

“The 19 licensed casinos in Iowa have the infrastructure, they’re used to working with the Racing and Gaming Commission, they’ve been doing this for 30 years in Iowa, and that seemed to be a better fit for what we’re looking to do with sports wagering,” Smith said.

He noted that there’s a risk to the state with the lottery offering sports betting that makes legislators uncomfortable. In Rhode Island, where the lottery runs the state’s sports betting operations, the state lost more than $1 million on the Super Bowl because more money in the region was placed on the champion New England Patriots.

“There’s no risk to the state if the casinos take it over and something happens with the outcome of the Super Bowl or Final Four that wasn’t expected,” Smith said. “Sometimes the books lose a large sum of money, and we don’t want state tax payers taking that risk.”

Two representatives of the lottery spoke at last week’s subcommittee hearing. Smith said they haven’t demanded to participate and no one from the lottery communicated opposition for the bill.

“I think they’re doing their due diligence as a government agency to offer their services if that’s the avenue we’re looking to go down,” Smith said. “As we go through amendments, it still might happen, but as of now it’s not a path the Senate is looking to go on.”

House tax rate ‘in the ballpark’

The House bill calls for 6.75 percent on gross gaming revenue with an annual fee of $15,000 for sports betting and $5,000 for daily fantasy sports. Ways and Means will need to approve those figures.

“I think we’re in the ballpark,” Smith said of the House tax and licensing structure.

Smith, also on the Ways and Means Committee, says he will be floor managing the bill through that committee and on the Senate floor.

Smith confident about IA sports betting

Although the bills barely passed in both committees — advancing by votes of 13-10 in the House and 8-6 in the Senate — Smith said people shouldn’t read too much into the close votes.

Committee votes in Iowa, he said, tend to stick mostly to party lines as a negotiating tactic with the majority Republicans able to push through legislation. He expects more bipartisan support in the full chambers.

“What tends to happen with bills like this is in the committee process is it seems like it’s more partisan, but as it works through the system, it becomes more bipartisan,” Smith said. “It happens with lots of bills in the capital.”