Iowa Bill For Internet Casino Gaming Filed In General Assembly

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Iowa Bill For Internet Casino Gaming Filed In General Assembly
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A House Study Bill was filed in the Iowa General Assembly on Monday calling to allow advance deposit wagering as part of a broader proposal to bring internet casino gaming to the Hawkeye State.

HSB 227, filed by Rep. Bobby Kauffman, who also serves as the House Ways and Means chairperson, would allow casino operators to have a maximum of two online casino skins and give the Iowa Racing and Gaming Commission the authority to approve a third skin. It would also authorize the IRGC to craft rules to enter multi-state online poker pools, as Michigan did at the start of the year, combining its players with those in New Jersey.

The potential of Iowa casinos to feature up to three online skins means there could be up to 57 online platforms available from the 19 casinos currently in operation. Reaching that maximum count, however, is highly unlikely considering New Jersey currently has the most online platforms among the six states offering iCasino at 32.

It is the second straight year Kauffman has filed a House Study Bill for internet casino gaming, having progressed HSB 604 out of the Committee on State Government as its chair in the previous assembly. That bill was never brought to a vote; the process was more about raising public awareness. That appears to be the plan again this year with more than one-third of Iowa legislators in the new General Assembly in their first term.

“It’s one of those that’s going to take a few years of awareness and education,” Iowa Gaming Association President and CEO Wes Ehrecke told US Bets. “That’s the point — raising attention to it. Or at least that’s what’s being intended here by Representative Kauffman, to continue the dialogue.

“I’m not sure when there’s going to be a subcommittee hearing on it or whether it will advance out of subcommittee, [but] I definitely know it’s not going to go all the way through the process this year.”

Other bill particulars

Similar to his 2022 filing, Kauffman is allowing existing sports wagering licensees to pursue internet casino licenses if desired, letting bettors use their pre-existing accounts for iCasino. All gambling venues — racinos, riverboats, and other gambling structures — are eligible for a license. Kauffman is again proposing an initial license fee of $45,000 and an annual renewal fee of $10,000. There was no mention of a tax rate for iGaming in the bill, which could mean it would be taxed at the same 6.75% rate as sports wagering — a number that matches Nevada for the lowest among U.S. states with legalized commercial sports betting.

This pragmatic approach is not surprising given Iowa’s history with mobile sports wagering. While the legislative process from legalization to launch in 2019 was relatively quick, it also included a lengthy in-person registration period for access to mobile wagering, which ended at the start of 2021 after 16-plus months of betting.

In 2021 and 2022, 89.2% of the $4.4 billion sports wagering handle in Iowa was generated via mobile wagering, and there are concerns about potential brick-and-mortar cannibalization and the effects iCasino could have on the strong ties between the casinos and their local communities. Casino revenue totaled $143.2 million in February and more than 1.3 million admissions were reported, while revenue for fiscal year 2023 has exceeded $1.1 billion.

“Each of these casinos, these are premier entertainment destinations in their communities, so they’re very in tune with what’s happening in their respective locations,” Ehrecke said. “This would become not unlike the education that took place when we legalized sports wagering and the mobile option that’s now heavily used. … It’s a little bit of apples and oranges with the people who still come to the casinos in person.”

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