Legalizing iGaming to Be a “Multiyear Effort” in Iowa

Iowa State Seal With Iowa Casinos

Iowa bettors hoping for more online betting options may have to wait until 2023. The Iowa House of Representatives recently “shut down” talks on a House Study Bill 604. HSB 604 would have legalized online casinos in Iowa.

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There are many reasons why HSB 604 stalled out this time around. Perhaps the biggest reason is that the legislation only had the support of 13 of Iowa’s 19 casinos. Despite not passing this session, proponents of the bill believe iGaming has built momentum for next year.

Another gaming bill could still be passed this year. HSB 578 could bring significant changes to the Iowa gaming landscape. If passed, the bill would expand the events bettors could legally bet on. It would also change certain licensing requirements and monetary penalties. HSB 578 needs to advance through its current committee by Friday, February 18th to be voted on this year.

What is Iowa HSB 604?

Iowa’s HSB 604 was introduced by Rep. Bobby Kaufmann. The bill was designed to allow casinos in Iowa to run online operations as well. Kaufmann’s bill advanced through a subcommittee at the beginning of February. Kaufmann and others are hopeful that the progress in this session can be used to build momentum for next year.

HSB 604 has been compared to gaming bills in Indiana that also recently failed to pass through the legislature. It included several industry-friendly components designed to gain support from Iowa’s casinos. The bill would have allowed casinos to acquire an initial online license for a fee of $45,000. Casinos could renew online licenses annually at a cost of $10,000.

Kaufmann’s gambling bill also would have allowed licensees to operate two branded mobile apps. Mobile betting has been instrumental in helping other states launch online casino betting. HSB 604 would have let casinos enter agreements for multijurisdictional online games that are allowed by federal and state law.

Rep. Kaufmann understands that the process for legalizing online casino operations will be a marathon, not a sprint. Kaufmann’s goal for introducing HSB 604 was to build momentum around the idea of an online casino bill. Despite the opposition from some of Iowa’s casinos, Kaufmann’s bill did make progress by successfully passing through a subcommittee.

Why Did HSB 604 Not Pass?

Rep. Kaufmann designed HSB 604 to allow Iowa’s casinos access to a new revenue source. Iowa allows casinos to operate online sportsbooks, and casinos have taken full advantage of online sports betting. Despite the success of electronic sportsbooks, many Iowa casinos still oppose online casinos.

Of the 19 casinos in Iowa, only 13 supported HSB 604. The remaining 6 casinos have voiced concerns about the impact online casinos will have on their revenue. Specifically, opponents have concerns about reduced ancillary revenue from their entertainment, lodging, and restaurants.

Casinos have invested millions of dollars to build their brick-and-mortar facilities. Opponents of HSB 604 fear online casinos could have the same impact that streaming services have had on movie theatre companies.

Without the support of all 19 Iowa casinos, no online casino bill is likely to pass. The Iowa Gaming Association (IGA) has not thrown its support behind the bill. According to IGA President and CEO Wes Ehrecke, the IGA is neutral on the concept of iGaming. The IGA will not likely support any online casino legislation until all of Iowa’s casinos can agree on it.

Changes Could Still be Coming to Iowa Gaming This Year

HSB 604 and future online casino bills still have a long way to go to garner enough support to pass. However, there is another casino bill that could be passed in Iowa this year. HSB 578 also passed through subcommittees this session. The bill would legalize new betting options for Iowans to wager on.

If passed, HSB 578 would legalize betting on eSports, such as League of Legends and Call of Duty. HSB 578 would also legalize betting on charitable sports events, the Heisman Trophy winner, and the NFL Draft. Bettors would also be allowed to use eWallets on their mobile devices to manage their bankrolls while at casinos.

The bill would also bring changes to many casino regulations. If it is passed, HSB 578 would remove licensing requirements for non-gaming personnel that work in hospitality positions. It would also eliminate fines for errors committed by casino employees in charge of managing jackpots.

Unlike HSB 604, HSB 578 is widely supported by Iowa’s casinos. However, it is opposed by some faith-based organizations in the state that take issue with cashless gaming. The bill is currently in the full Committee on State Government. It would need to be advanced through the committee by February 18th to be able to be passed this session.

Conclusion

Despite some progress in the legislature, Iowa’s online casino bill will not be passed this year. HSB 604 would have allowed all 19 of the casinos in Iowa to launch online operations. The bill passed through the subcommittee but has since been shut down. Despite failing to pass this year, there is still plenty of optimism around a future online casino bill.

Proponents of the bill are hopeful that they can build off their success from this year in the future. The bill not passing this year was not a surprise. Rep. Kaufmann, the author of the bill, has stated that passing an online casino bill will be a “multiyear effort.”

Iowa allows online sports betting, and many casinos have benefited from electronic wagers. However, there are concerns from a minority of casinos that legalizing online casinos would negatively impact their other revenue. With millions of dollars already spent on their on-site operations, casino operators want to protect their investments. For a bill to pass in the future, it would need to address these financial concerns.

Another bill could pass this session that would also expand betting options in Iowa. HSB 578 has the support of Iowa’s casinos. It would allow wagering on eSports, charitable events, the NFL Draft, and the Heisman Trophy. HSB 578 would also remove some fines and licensing requirements.