DES MOINES — Basketball tournament fever is gripping Iowa, but the real madness may not set in until next March when adult residents could have the chance to legally place bets on their NCAA favorites.
Iowans should know by sometime in April whether a majority of state legislators in the House and Senate favor legalizing wagers on professional, college and Olympic sporting events and on daily fantasy sports, and if Gov. Kim Reynolds endorses their work product.
Elected officials in Iowa are looking to join a small but growing number of states that have legalized sports wagering since the U.S. Supreme Court last year struck down a ban on the activity. Backers argue that American are wagering up to $150 billion annually on sporting events but much of it is bet illegally using bookies or offshore bookmakers.
“We are not approving an expansion of gambling,” said Rep. Bobby Kaufmann, R-Wilton, who is leading an effort to legalize sports wagering in Iowa. “We are choosing to not ignore an expansion that is here. We’re choosing to police, regulate and tax something that is already here.”
Opponents see the move as a threat to the integrity of college athletics and an allure to vulnerable Iowans — especially young tech-savvy ones — using online and electronic transactions that bring new features to the state’s gambling environment.
“Once we regulate it, it’s going to be going on steroids and I think there are going to be people perfecting the art of sports betting,” said Sen. Joe Bolkcom, D-Iowa City. “I just think it’s the wrong approach. This is going to make it a more marquee, front-and-center opportunity for people to gamble and, obviously, there will be people who will have problems with it. It might be going on now, but by institutionalizing it and putting it under state control you’re going to get a lot more participation in this kind of gambling.”
Rep. Vicki Lensing, D-Iowa City, said she would prefer to see college sports removed from the legislation being readied for debate in the Iowa House and she applauded a move last week to ban in-play bets on Iowa college players, teams and their opponents as restrictions on traditional collegiate wagering.
In-play bets would be allowed for games not involving Iowa teams, and gamblers still could bet on the outcomes of all games.
“Our concern was athletes are minors. They are playing for the sport of the game and not to be influenced by money or anything else that might change how they play the game,” said Lensing. “I’m not assuming that young athletes would be swayed, but we want to take away that temptation.”
Wes Ehrecke, president and chief executive of the Iowa Gaming Association, which represents the state’s casinos, said college athletics like the Iowa Hawkeyes and Iowa State Cyclones is a sizable share of the sports-betting market and removing those teams from the bill would benefit illegal, unregulated gambling enterprises.
“The whole point of this is bringing sports betting out of the black market. Cutting out collegiate is just making a niche in the black market for bookies to continue to take advantage of,” said Kaufmann. “If anything corrupt is happening right now with a bookie, you’ve got no recourse. This allows the policing of sports betting which currently doesn’t exist.”
Officials at Iowa’s three regent universities have remained neutral on the legislation and kept a low profile as the sports-betting debate has unfolded at the Statehouse. But they applauded the move to bar bets on individual player performances.
“Maintaining the integrity of our student-athletes is of paramount importance to the board. This amendment is a positive step in that direction,” said Josh Lehman, communications director for the Board of Regents, which oversees operations of three public universities in Ames, Cedar Falls and Iowa City.
“We will continue to monitor the language of the bill as it moves through the legislative process. We want to ensure that the integrity of our student-athletes is preserved,” he added.
Senate Majority Leader Jack Whitver, R-Ankeny, a former Division I wide receiver at Iowa State University from 1999 to 2003, said the universities’ compliance officers to a good job educating players about the potential pitfalls of big-time college athletes they may encounter.
“The sports betting, that didn’t really ever come into the equation. You never even thought about it. You’re worried about winning games and the focus was always on winning a game by one point,” said Whitver.
“They certainly educated us as far as the possibilities of people doing illegal betting and the possibilities of them trying to corrupt the game,” he noted, “but the thought of any kind of sports betting when I was in college — it didn’t really cross your mind.
“Part of the reason for doing this sports gambling bill is to bring that sports wagering out of the darkness, out of the black market into a regulated atmosphere so that if something funny is happening with bets on certain games or certain players it can be identified by the (Iowa) Racing and Gaming Commission,” Whitver said.
Architects of Iowa’s sports-betting system envision one in which Iowa residents at least aged 21 who want to bet on sports are required to establish a sports betting account in-person at a casino within the first 18 months of the new law. After that period, remote sign-ups would be allowed.
Initially, lawmakers are looking at a 6.75 percent tax rate on revenue, and annual licensing fees paid by the venue of $15,000 for sports betting and $5,000 for daily fantasy sports. But amendments likely will be offered during floor debate to push that tax rate higher, said Rep. David Jacoby, D-Coralville.
“I want to exercise extreme caution to those who think that this will be a cash cow. It will not,” Kaufmann noted during last week’s committee work.
Dan Kehl, chief executive officer of Elite Casino Resorts, which owns and operates state-licensed casinos in Riverside, Davenport and Lyon County, said his company doesn’t view sports betting as “a huge financial windfall” for gaming revenue “but we see it as a good opportunity to attract a new clientele to the property.”
Sen. Roby Smith, R-Davenport, chairman of the Senate State Government Committee, said there is a lot of work that remains for proponents to get a bill to the governor’s desk in the session’s remaining weeks, but added, “I feel good that it’s going to happen. I can’t obviously promise or guarantee that, but I think the chances are we will get it accomplished versus not getting it accomplished.”
Jacoby said Republicans, who hold a 54-46 majority in the House, lack the 51 votes needed to pass a sports-betting bill so it will require bipartisan support.
Kaufman was optimistic that will happen.
“I’m making changes as we go that are necessary to get the votes that I need and I think that we have the momentum,” he said in calling the chances for passage “very high.”
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