Iowa may pass an online casino bill in 2024, but it would need to change some minds in the state’s retail casino industry. A bill is almost certain to appear in the next legislative session, but it won’t have much chance of passing without unanimous support from existing gaming interests.
There have been iGaming bills introduced in 2023 and before, but they didn’t go anywhere. Iowa has already legalized online sports betting, so if the casino industry were to advocate for a bill and present supporting data from other states, lawmakers might be convinced. But before that could happen, online casino proponents must convince holdout casinos and address their concerns.
Gambling Picture in Iowa
The Hawkeye State has 19 commercial casinos and four tribal casinos. One of the commercial casinos, Prairie Meadows, is also a horse racetrack. The state also legalized sports betting in 2019, and there are 19 sportsbooks available at retail casinos and online.
Sportsbooks also offer horse racing, a sport with a long history in the state. Not surprisingly, the horse racing industry is one of the biggest opponents of legalizing online casinos.
As mentioned, there have been some bills introduced in the past to legalize online casinos. They all came from Rep. Bobby Kaufmann, R-Wilton, one of the biggest supporters of iGaming in the state. He sponsored HB227 this year and similar bills in 2021 and 2022.
As he stated himself, he knew nothing would happen until at least 2024, but he wanted to raise awareness. He described the process as a “multiyear effort.” Last year, Iowa passed a 2-year moratorium on retail casinos, which would affect online casino bids.
All Commercial Casinos Must Get on Board
In addition to the moratorium, there were other significant hurdles. In January, Wes Ehrecke, President and CEO of the Iowa Gaming Association (IGA), told PlayUSA that an online casino bill in 2023 doesn’t stand a chance. According to him, more than 50 new legislators were bringing in new priorities, and online casinos were not among them.
Ehrecke added another piece of crucial information. According to him, 13 casinos support online casino expansion, while six don’t. The number is unchanged from 2022. Because some casinos oppose it, Ehrecke said the IGA does not promote online casino legalization.
Rep. Kaufmann agrees that all casinos must get on board. In 2022, he said:
We need to get all the casinos on board. Until that happens, the chances of it passing are zero.
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Casinos That May Support Online Casino Legalization
The Sports Betting Alliance (SBA) was one of the first iGaming advocates that spoke during the March 21 subcommittee hearing for Kaufmann’s HB227 bill. SBA is “a coalition of legal sports betting platforms,” which includes BetMGM, FanDuel, DraftKings, and Fanatics.
Lobbyists and representatives of 13 casinos have also shown support for legalizing online casinos in Iowa.
Ameristar is owned by Penn Entertainment (formerly Penn National Gaming). Penn Entertainment owns Barstool Casino and Sportsbook and theScore in Canada. The company’s lobbyists have declared their support for online casinos.
Caesars Entertainment Properties
Caesars Entertainment owns four properties in Iowa: Harrah’s Council Bluffs, Horseshoe Council Bluffs, Isle Casino and Hotel Bettendorf, and Isle Casino and Hotel Waterloo. The company operates an online casino in Michigan, New Jersey, Pennsylvania, and West Virginia, so it is likely on board for expansion in Iowa.
Diamond Jo Casinos
Boyd Gaming owns these two casinos in Dubuque and Northwood. Boyd also operates the Stardust brand, which recently relaunched online in New Jersey and Pennsylvania. Boyd’s lobbyists have consistently supported iGaming expansion in Iowa.
Wild Rose Casinos
Wild Rose Entertainment is an Iowan company that operates three casinos in Clinton, Emmetsburg, and Jefferson. The company’s lobbyists have also consistently supported iGaming expansion.
Catfish Bend Casino
While lobbyists for the casino’s parent company Great River Entertainment have not declared their intentions this year, they were for online casinos in 2022. They would likely support a future bill.
The Q Casino is owned by the city of Dubuque and operated by the Dubuque Racing Association, a non-profit company. While Ehrecke does not mention 2021, that was the last time Q Casino lobbyists declared support for iGaming expansion. Unless there’s a change of heart, Q Casino should support online casinos.
Lakeside Hotel and Casino
Affinity Interactive owns Lakeside Casino. The company has kept quiet on its intentions, with no lobbyist representation. While Affinity is connected to horse racing through its Daily Racing Forum newspaper and DFS Bets horse race betting platform, other businesses suggest it might be interested in mobile casinos.
In addition to its DFS Sports sportsbook, Affinity has recently launched a social casino called A-Play Online. A social casino is an excellent way for the company to establish a presence that could be used to pursue an online casino.
Casinos That May Oppose Online Casino Legalization
Looking at lobbyist declarations for the past three years, we can see that four casinos currently do not support iGaming, while two seem to have their focus elsewhere.
Prairie Meadows Casino, Racetrack, and Hotel
Iowa’s only racetrack is perhaps the state’s most significant opponent of online casinos. The property, located just outside of Des Moines, is owned by Polk County. It operates as a non-profit organization.
The casino and county lobbyists have constantly opposed online casinos. The relationship with Caesars Entertainment could be a key to flipping the casino representatives. The company operates its Caesars Sportsbook at Prairie Meadows.
Elite Casino Resorts
The company operates three casinos in Iowa, Riverside Casino and Golf Resort, Grand Falls Casino and Golf Resort, and Rhythm City Casino Resort. This year, lobbyists for the company were “undecided” on HB227. They were against the 2022 bill.
However, the company’s lobbyists supported online casinos in 2021. With some data and solutions, Elite Casino Resorts could flip back to supporting iGaming.
Hard Rock Hotel and Casino
Contrary to the name, the Hard Rock Casino is not owned by Hard Rock International but by Churchill Downs Inc. (CDI). CDI used to operate an online casino and a sportsbook called Twinspires. However, it decided to shut both businesses down. The Twinspires brand is still active, but the company shifted its focus to horse race betting.
While it’s unconfirmed that CDI is against online casinos in Iowa, its exit from the segment and recent opposition to online casino legalization in New Hampshire point in that direction.
Casino Queen Marquette
Queen Marquette is one of the casinos that has yet to declare its intentions. It’s also one of a few state casinos not represented by lobbyists.
Queen Marquette could be a holdout because of its new Queen Sportsbook. The casino’s previous partner, Fubo Sportsbook, recently ceased operations. As a result, Queen Marquette partnered with Bet365, which launched in June as an online partner.
Meanwhile, the casino’s parent company launched an in-house brand, Queen Sportsbook. In addition to retail operations, Queen Sportsbook is going through an approval process to launch a mobile sportsbook in Maryland, meaning the company is looking to expand.
Possible Reasons To Oppose Online Casinos
The holdout casinos have their reasons for not supporting iGaming. Some have monetary concerns, while others cite gambling addiction and access to minors.
Like in other states, cannibalization is often the most mentioned reason. Would online casinos take revenue away from retail locations? While the industry believes so, data and multiple reports suggest otherwise.
In Michigan, retail casinos are showing strong growth and have surpassed 2019’s numbers that were prior to the legalization of online casinos. The situation is similar in Pennsylvania. Retail casinos there are posting similar monthly revenue to 2019. On top of that, five casinos have opened since 2019, showing that the sector is not slowing down.
Increase in gambling addiction
According to Iowa Rep. Jacob Bossman, another reason for resistance to iGaming expansion is an increase in gambling addictions. Some opponents fear that with the increase in gambling and added comfort of playing at home, the percentage of people with gambling problems would rise.
But while that might be true in some cases, it’s not necessarily the case everywhere. According to the Council on Compulsive Gambling of Pennsylvania (CCGP), calls for help from retail and online gamblers are roughly equal. CCGP points out that the increased calls are due to raised awareness.
States are introducing more tools to fight gambling addiction. New Jersey has led the way with efforts like a Responsible Gaming Coordinator. The state also has introduced data-sharing requirements to track potential problem gamblers and other tools aimed at younger players.
There are also increasing multi-state efforts. During the National Council of Legislators from Gaming States 2023 Summer Meeting in July, a committee unanimously agreed on a responsible gaming resolution to help states fight problem gambling.
How Can the Holdouts Be Convinced?
For Iowa to have a chance of passing an iGaming bill in 2024, proponents like Rep. Kaufmann need to find solutions and supportive data to reduce holdout casinos’ concerns. While the biggest concern is cannibalization, updated data from other states that show otherwise will help.
Plans for responsible gaming initiatives and programs must also be implemented. Iowa could look at states like New Jersey, which is constantly rolling out new tools to reduce problem gambling.
Moreover, iGaming proponents should point out that Iowa casinos are likely already losing money to illegal offshore casinos. Thanks to advertising in mainstream media, many Iowans are already playing at offshore casinos and thinking they’re legal. Furthermore, online casinos could offset future losses to neighboring Nebraska, which is building casinos close to Iowa’s border.