Legislative Day: Will Iowa Legalize Sports Betting?

In May, the U.S. Supreme Court handed down a decision that allows states to legalize, tax and regulate sports betting. Until then, Nevada was the only state where fans could legally put bets on games and point spreads. Eight states have now legalized sports betting.

Several proposals that would legalize sports betting in Iowa are set to get a first hearing at the statehouse Wednesday, and lawmakers will hear from numerous competing interests.

Four different industries are advocating for a sports betting program that would favor them. The Iowa Lottery, casinos, professional sports leagues, and racetracks each support different proposals. 

Rep. Bobby Kaufmann (R-Wilton) said he will produce a final bill after lawmakers hear from stakeholders and the public.

“I don’t think it has to be all win or lose,” Kaufmann said. “I think there’s probably going to be someone who gets more than others, just simply because you’re dealing with a committee that has members that have ties to different industries.”

Sen. Jeff Danielson (D-Cedar Falls) supports legalizing sports betting and said gambling laws have always been bipartisan.

“This is not a Republican or Democrat issue,” Danielson said. “This is individual senators’ or representatives’ own personal experience, their own feelings about it, their own district and the way it would affect them.”

Kaufmann said one aspect that has some consensus is a proposed 6.75 percent state tax on sports betting revenue. He said it’s unlikely that will bring in much money for the state.

“All the estimates show that the amount of dollars that are created out of this is not a game changer,” Kaufmann said. “And I think one of the big flaws of other states that have done this is making the taxation rate so high that people are not encouraged to come out of the shadows.”

And he said the whole point of this effort is to tax and regulate sports betting that is already happening illegally.

Some lawmakers oppose gambling for moral reasons or because of concerns about gambling addiction. Religious groups and the Iowa Behavioral Health Association, which represents addiction treatment providers, are registered in opposition to sports betting legalization.

Keith Whyte, Executive Director of the National Council on Problem Gambling, said it’s true that Iowans are currently betting on sports illegally, but he’s concerned about legalization’s potential impact on gambling addiction.

“It’s also likely true that when a state legalizes and expands and gives sports betting its approval…you will probably have more people gamble, and existing gamblers will be gambling more,” Whyte said.

Whyte wants any sports betting proposals to include programs and money to help people struggling with gambling addiction, and he noted the current proposals don’t have that.

Sen. Danielson said it’s important to think about opening up options to place bets from mobile apps. That would be possible under a proposal from the casinos.

Danielson added it would help casinos modernize their business model, and would provide options for preventing problem gambling.

“It is much easier to cut the feed off on an online gamer than it is to walk up to them on the floor and figure out their behavior,” Danielson said.

Republican Gov. Kim Reynolds declined to weigh in Tuesday, saying she will let the sports betting proposals go through the legislative process.

“I think it needs to be regulated,” Reynolds said. “It’s happening. It’s happening to a big extent.”

During this hour of River to River, host Ben Kieffer and State Government Reporter Katarina Sostaric discuss the proposals. Guests include President and CEO of the Iowa Gaming Association Wes Ehrecke, Republican State Representative Bobby Kaufmann, Democratic State Senator Jeff Danielson, Drake University Law Professor Keith Miller and Executive Director of the National Council on Problem Gambling Keith Whyte.