Iowa Third State to Legalize Sports Betting This Month

Nearly one year to the day after sports betting became legal on the federal level, Iowa became the third state to officially regulate the industry in 2019.

In fact, when Governor Kim Reynolds signed Senate File 617 – which legalizes both brick and mortar and online/mobile sports wagering – on May 13th, Iowa was the third state to cross the finish line in a 10-day span.

The Governor of Montana signed sports betting legislation on May 3rd, and his counterpart in Indiana followed up five days later by doing the same.

All told, 12 states have taken advantage of the U.S. Supreme Court ruling last May which repealed the federal ban on sportsbooks outside of Nevada. The Professional and Amateur Sports Protection Act (PASPA) of 1992 was ruled null and void on May 14th of 2018, with a 6-3 decision in the case of Murphy v. NCAA deeming the law to be in violation of the 10th Amendment’s anti-commandeering clause.

Since the landmark ruling was handed down, seven states – Delaware, New Jersey, Mississippi, West Virginia, New Mexico, Pennsylvania, and Rhode Island – have legalized and launched sportsbooks via licensed land-based and/or online/mobile operators. And along with Iowa, Indiana, and Montana, similar legislation has already been approved in Arkansas and Tennessee.

Lawmakers Scramble to Keep Pace; Send Bill to Gov. in Two Weeks

With neighboring Illinois considering several sports betting bills for the second straight year, the Iowa Legislature needed just two weeks to introduce, debate, and approve SF-617.

The bill was introduced by state representative Bobby Kaufman (R-73) and state senator Roby Smith (R-47) back on April 8th. By April 17th, the Senate voted 31 to 18 in favor, followed by a 67 to 31 vote in the House on April 22nd to send the bill to Reynold’s desk.

The Legislature’s haste may be attributable to a regional “arms race” towards eventual sports betting supremacy. Indiana became the first Midwestern state to legalize sportsbooks only five days before Reynolds signed off, and Illinois is currently in the midst of an intensifying legislative debate.

The Governor was given 30 days to either sign SF-617, allow the bill to become law without her endorsement, or exercise the executive branch’s veto powers to kill it off entirely.

Reynolds initially declined to offer comment on her intentions, prompting many observers to predict the Republican would bow to pressure from Iowa’s powerful conservative political bloc. But despite polling from the Des Moines Register which found 52 percent Iowans oppose legal bet shops, Reynolds ultimately decided to let the Legislature’s work stand up.

Spokesman Pat Garrett later sent a letter to local media outlets outlining Reynold’s motivations:

“Gov. Reynolds believes that legalizing sports betting will bring this practice out of an unregulated black market.

This law will regulate, tax, and police sports betting in a safe and responsible way.”

Bettors and Operators Look Forward to Late Summer Launch

SF-617 authorizes the Iowa Racing and Gaming Commission (IRGC) to consider license applications from the Hawkeye State’s 19 commercial casinos and four tribal casinos.

Prospective sportsbook operators must pay $45,000 to obtain a license, along with an annual fee of $10,000 to renew the privilege, and wagers can be taken through land-based retail bet shops or through an online/mobile platform. Operators are also free to partner with software designers and bookmakers to power their online/mobile offerings.

Following the industry’s launch – which is targeted for “late summer” of this year per the IRGC – bettors can place wagers from anywhere within Iowa’s borders. Online / mobile apps do, however, require a one-time live registration via their associated physical venues.

Iowa’s government will tax gross gaming revenue at a rate of 6.75 percent, plus an additional 0.75 percent levy which will be diverted directly to local charitable organizations.

Potential operators like Ameristar Casino in Council Bluffs are currently preparing to take their first bets by July or August.

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