Iowa Online Casino Bill Hearing Primarily Populated by Opponents

Opponents were the primary speakers during an Iowa online casino bill hearing on March 21. The 20-minute-long hearing for HSB227 included representatives of brick-and-mortar casinos who speculated that iGaming would cannibalize revenue and others who thought 24/7 mobile availability would cause a spike in gambling addiction.

Bill sponsor – state Rep. Bobby Kaufmann, R-Wilton – uttered one sentence at the end of the Iowa House of Representatives Ways and Means Committee hearing.

The committee chairman said:

I wanted to put this out there because it’s coming in the future, and I wanted to start a conversation.

He’d only introduced HSB227 on March 8, past time when a bill would likely become law. Kaufmann also sponsored an iGaming bill in 2022 – HSB604.

However, it seemed clear from the start that Iowa wouldn’t be likely to legalize online casino gambling this year. The Hawkeye State is nine months into a 2-year-long moratorium on granting new retail casino licenses.

Only New Hampshire’s online casino bill remains viable to become law during 2023.

Bills in Indiana, Illinois, Kentucky, Maryland, and New York have already dropped off of the 2023 radar.

UPDATE: 03/29/2023

On March 22, HSB227 returned to the Iowa House of Representatives Ways and Means Committee from the hearing “without recommendation.”

Iowa Online Casino Bill Hearing – Advocates

The first testimony in today’s committee hearing came from a Sports Betting Alliance (SBA) representative. The Iowa General Assembly lists the SBA as a lobbying group.

The SBA describes itself as “a coalition of legal sports betting platforms.” On its dot-org site, it lists its members as:

  • BetMGM
  • DraftKings
  • FanDuel
  • Fanatics Sportsbook

Fanatics Sportsbook hasn’t launched online yet anywhere in the US. It does have a physical sportsbook. On Jan. 20, Fanatics Sportsbook opened at FedExField in Maryland, with an online arm, including Fanatics Online Casino, expected in the near future.

However, BetMGM, DraftKings, and FanDuel already accept sports bets in Iowa. The state legalized online sports betting in 2019. Taxed at 6.75%, it’s generated $24,874,927 in revenue for the state, reports PlayIA. Like Bonus, PlayIA is a publication in the Catena Media family of brands.

Bonus finds that if Iowa also taxes online casino gambling at 6.75%, it might yield $35 million a year.

Meanwhile, at the hearing, the SBA representative testified on behalf of legalizing Iowa online casino gambling. He cited research by a nonprofit trade organization, the American Gaming Association (AGA), regarding illegal offshore sites.

He performed long-tail Bing searches to prove to the audience that illegal sites are easy to find and aren’t down “some dark alley.”

The searches included:

• Where can I play poker for money in Iowa

• Iowa’s best legal poker sites …

The SBA representative immediately found Bovada and Ignition, which are offshore sites.

He said:

I can play slots. I can play casino games. … Most Iowans probably think it’s legal to play.

A sports betting operator’s representative introduced himself in person, and a few silently attended on WebEx.

Iowa Online Casino Bill Hearing – Opponents

Testimony on behalf of Iowa’s 19 retail casinos centered on possible revenue cannibalization. In February, those casinos generated more than $143 million in adjusted gross revenue, according to the Iowa Racing and Gaming Commission (IRGC).

Meanwhile, Iowa sportsbook revenue totaled $11.9 million that month.

No one alleged that sports betting cannibalized casino revenue during today’s hearing.

Online gambling operators tell lawmakers that iGaming doesn’t cannibalize land-based casino revenue.

Another hearing attendee questioned whether online casino gambling is more apt to cause addiction than betting in physical casinos. Alex Weldon of Bonus wrote for PlayUSA that data from the Council on Compulsive Gambling of Pennsylvania (CCGP) shows calls for help from retail and online gamblers are roughly equal.

The outcome of today’s Iowa online casino bill hearing seems to confirm what BetMGM CEO Adam Greenblatt said in January – that cannibalization worries would be the main objection greeting 2023 iGaming legalization efforts.

So unless New Hampshire passes its bill, the current US online casino states may remain the same:

  • Connecticut
  • Delaware
  • Michigan
  • New Jersey
  • Pennsylvania
  • Nevada (online poker only)
  • West Virginia

About the Author

Heather Fletcher

Heather Fletcher

Heather Fletcher is Lead Writer at Bonus, concentrating on online casino coverage. She specializes in breaking news, legislative coverage, and gambling marketing strategy overviews. To reach Heather with a news tip, email [email protected].
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