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Iowa Gaming Legislation History

Any form of gambling was considered illegal across the Hawkeye State for an extensive period of time, lasting from 1846 to 1972. . Lifting the ban was caused repealing of Article III, section 28, of the 1857 Constitution of Iowa.

There was a provision just a little more than a decade before in the 1846 Constitution of Iowa, which prohibited the state from authorizing a lottery system. This meant that the state or anyone residing there could sell lottery tickets.

After Article III, section 28 was repealed, an identical Joint Resolution was passed in 1972. This was ratified in the general election in the same year. The General Assembly took this opportunity a step further a year later by allowing games of chance such as bingo and raffles to be conducted by organizations and organizations that have been given the authority to do so.

A decade later, the Iowa Legislature passed the Pari-Mutuel Wagering Act that essentially allowed residents in Iowa the ability to place bets on dog and horse racetracks. Introducing the state lottery in 1985 brought the ban of these games to an end.

The sale of state lottery tickets generated solid revenue for the state. In doing so, Iowa decided to introduce inter-state lottery games like the Powerball.

In 1990, Iowa looked to expand the gaming market with the Iowa Racing and Gaming Commission boat gaming licenses for riverboat casinos. Just a year later, in 1991, the first riverboat casinos would open in the United States in the waters of Iowa.

In 1992 the General Assembly would prohibit granting licenses to video lottery machines which would disperse cash, prizes, tokens, and other types of winners to users who won. In a matter of two years, slot machines were permitted to be used at pari-mutuel racetracks.

That would open the door for land-based casinos that offered a wide variety of games similar to the ones offered in Atlantic City and Las Vegas. With land-based and riverboat casinos gaining popularity, the state could generate a lot of revenue.

Tax Revenue Piles In

The gaming tax revenue for the state has totaled over $6 billion since then. The generated revenue brought new projects to those in the Hawkeye State.

Iowa has a unique rule regarding casinos. The state has given individual counties the option to allow casinos to operate in their specific jurisdiction. A gambling game referendum awards casinos permission to operate in the area.

As of right now, 22 casinos operate in the state, and three casinos currently operate on tribal lands. New laws also allow sports wagering to happen in racetracks.

PASPA Effect in Iowa and Post-PASPA

The Professional and Amateur Sports Protection Act prohibited Iowans from sports betting since its full effect on January 1, 1993. Residents who wanted to place wagers on sporting events would have to resort to using offshore sportsbooks and local bookies. The only states exempt from this rule were Nevada, Delaware, and Oregon.

Compared to other states that pushed for sports betting, Iowa does not have an extensive history of sports betting. Gambling in casinos and lotteries was the norm for residents. However, sports betting was on the state’s mind when the Supreme Court overturned PASPA. Overturning PASPA launched sports betting to new heights.

New Jersey fought hard against PASPA and other sports leagues that believed sports betting would ruin the integrity of the game. Iowa saw this as an opportunity to bring sports betting to the state in the hopes of generating revenue similar to the lottery approach.

In 2019, Iowa Senate Bill 679 passed with the rules and regulations regarding sports betting in the bill. On August 15, 2019, both retail and mobile sports betting became legal; thus, Iowa became the 11th state to join the industry. In terms of geography, Iowa also became the first state to allow sports betting in the upper Midwest.

The Rise of Mobile Sports Betting in Iowa

Sportsbooks that received approved licenses waited out the in-person registration requirements. In-person registrations rules make people go to a casino to register for sports betting. In December 2020, only eight sportsbook operators accepted wagers at the time, and the number increased to 18 now.

The state is also trying to avoid any problems for bettors. The use of credit cards to fund an individual’s account has been illegal since the Summer of 2020. In other states in the industry, credit card companies declined transactions when sports betting first launched in the United States.

Iowa has a low barrier of entry, allowing sportsbooks to conduct business in the state under one condition. Sportsbook operators must partner with brick-and-mortar casinos to join the market.

No professional sports franchises call Iowa home, but the state has a strong collegiate sports presence with widespread support for the University of Iowa, Iowa State University, Drake University, and the University of Northern Iowa. Iowa residents support teams like the Chicago Bulls, Minnesota Vikings, Green Bay Packers, Minnesota Wild, and others.

Iowa may not host any professional organizations, but it is home to the Iowa Speedway known as “The Fastest Short Tack on The Planet” because it is the shortest track in NASCAR with just 88 miles.

You can bet on college sports, there is one exception. Bettors cannot place bets on collegiate player props as it measures the student-athlete’s individual performance. You must be 18 years old to make wagers as well.

Iowa became the 10th state to surpass the $3 billion total handle mark in the post-PASPA era. As the in-person registration rule no longer exists, the average sports betting volume will increase as of January 2022. Sportsbook operators are subject to a tax rate of 6.75 percent based on revenue.