Iowa is joining the likes of Nevada and New Jersey, because it became the third state this year to legalize sports betting. Republican Gov. Kim Reynolds signed a bipartisan bill into law on Monday. Indiana and Montana have also legalized sports betting in 2019.
Bettors cannot immediately begin placing legal wagers on sports as the Iowa Racing and Gaming Commission is now tasked with developing and setting up policies to regulate the industry. The IRGC expects to be completed instituting its regulations by August, though that is not a hard deadline.
Once the IRGC completes the regulatory process, bettors in Iowa age 21 and older would be able to wager on sports -- though not on any Iowa-based collegiate team -- at any of the state’s 19 casinos. And bettors can also wager online on apps such as DraftKings and FanDuel, provided they first preregister in-person at a licensed casino.
Iowa is the latest state to legalize sports betting following the U.S. Supreme Court striking down the Professional and Amateur Sports Protection Act of 1992 last May, a ruling that prohibited wagering on sports outside of Nevada. But in the aftermath of that ruling, operational sportsbook have since opened in Delaware, Mississippi, New Jersey, New Mexico, Pennsylvania, Rhode Island, and West Virginia.
Iowa legalizing sports betting befits its reputation as one of the more progressive gaming states in the country. After legalizing pari-mutuel horse-race betting in 1983, Iowa eight years later became the first state to have riverboat casinos.
That openness to legalized gaming allowed Iowa to largely avoid the lengthy legislative process that have bogged down other states attempting to institute legalized sports betting.
Instead of an excessive tax on revenues that both Pennsylvania (36 percent of winnings) and Rhode Island (51 percent fee) implemented, Iowa lawmakers approved a 6.75 percent tax on revenues in addition to a 0.75 percent reallocation for charitable charges.
The tax rate places Iowa on par with Nevada, the state that generates the most revenue from gaming and below every other state -- most of which exceed 10 percent.
Iowa lawmakers also approved online wagering, an option that has proven to be a difference-maker in the 11 months since the Supreme Court overturned PASPA.
States where online sports wagering is not authorized have largely struggled to generate the volume of revenue that was initially anticipated when sports betting was legalized. Whereas in New Jersey, currently the only state other than Nevada that offers online wagering, a thriving sports-betting market has developed that has even seen New Jersey on occasion surpass Nevada in monthly revenue.
More than 80 percent of the total amount wagered in New Jersey is generated via betting online.
Even before sports betting became legal in Iowa, casinos within the state were positioning itself to capitalize on the expected expansion of gaming. Prairie Meadows Racetrack and Casino in Altoona and Catfish Bend Casino in Burlington partnered with bookmakers William Hill U.S. and PointsBet, respectively, to operate proposed sportsbooks at each property.