In May of 2018, The Supreme Court of the United States cleared the way for states to permit sports betting in its Murphy v. NCAA decision. Before that case was decided, Congress limited sports wagering to only four states, which had approved sports betting regulations before the Professional and Amateur Sports Protection Act (“PASPA”) banned such gambling nationwide. Soon after portions of the PASPA were struck down for violating the anti-commandeering principles of the Constitution in Murphy, state lawmakers began introducing legislation to make the practice legal in their jurisdictions.[1]

             Nearly one year after the Murphy decision, Governor Kim Reynolds signed into law a bill that would allow sports betting in Iowa.[2] With the Iowa Racing and Gaming Commission now working on promulgating specific regulations regarding the new legislation, Iowa joins Nevada, New Jersey, New York, New Mexico, Delaware, Mississippi, West Virginia, Pennsylvania, Rhode Island, Arkansas, Indiana, Montana, and Washington D.C. as the first jurisdictions to offer sports betting in the wake of Murphy.[3]

            Iowa’s statute allows casinos to take bets on professional, collegiate, and international sporting events. Additionally, internet fantasy sports betting is permitted through properly licensed service providers. However, the law prohibits wagering on minor league, amateur, and high school sports. Proposition betting based on the performance of individual athletes on college sports teams is also banned.[4] Proposition or “prop” bets are wagers based on the occurrence or non-occurrence of events that do not directly bear on the final result of an athletic contest. Thus, while a bettor might place a proposition bet that a professional football player will achieve a certain number of rushing yards in a single game, she would not be able to make a similar wager in a contest between the University of Iowa and University of Nebraska college football teams. Revenues after all bets are settled will be taxed at 6.75%.[5]

Any properly licensed Iowa gambling facility may accept sports bets. Such facilities must pay a $45,000 licensing fee and a $10,000 annual renewal fee to offer sports betting.[6] Additionally, the law provides for mobile betting schemes, which would only permit bets made within Iowa’s borders.[7] In order to place initial bets with mobile devices, bettors must first present themselves at a gambling facility to verify their ages. Though the Racing and Gaming Commission has yet to promulgate final rules regarding mobile betting, it is likely that an advanced-deposit procedure would allow verified bettors to place their wagers without making repeat trips to gambling facilities. However, as these applications would only function within Iowa borders and betting across state lines would violate the Federal Wire Act, bettors in states like Nebraska would need to cross into Iowa territory every time they would like to make a new wager.[8]

 Finally, before any gamblers can place their bets in Iowa, they must wait for the Iowa Racing and Gaming Commission to finalize sports gambling regulations, which commission members forecast to accomplish by mid-August 2019.[9]

As gaming and gambling have grown, so too have the associated laws and regulations. At Fraser Stryker, our attorneys can help clients navigate this new legal terrain. Leveraging our Sports, Technology & Licensing and Litigation practice areas, we offer our clients a unique platform of expertise. Our attorneys are ready to advise both brick-and-mortar and online gaming and sports betting operators, entrepreneurs, and investors in navigating the complex federal, state, tribal, and local laws. To learn more, please contact one of the members of the Firm’s Gaming & Sports Betting practice area and explore our publications analyzing the rapidly changing landscape for this industry.

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[1] https://www.legalsportsreport.com/sportsbetting-bill-tracker/.

[2] 2019 Ia. SF 617. Governor Reynolds signed SF 617 into law on May 13, 2019.

[3] https://www.legalsportsreport.com/sportsbetting-bill-tracker/; http://www.espn.com/chalk/story/_/id/19740480/the-united-states-sports-betting-where-all-50-states-stand-legalization.

[4] 2019 Ia. SF 617; https://www.desmoinesregister.com/story/sports/2019/05/20/sports-betting-legal-iowa-app-where-bet-casino-how-gamble-college-pro-fantasy-draftkings-fanduel-nfl/3667712002/.

[5] https://www.desmoinesregister.com/story/sports/2019/05/20/sports-betting-legal-iowa-app-where-bet-casino-how-gamble-college-pro-fantasy-draftkings-fanduel-nfl/3667712002/.

[6] 2019 Ia. SF 617.

[7]https://www.omaha.com/news/politics/bills/legalized-sports-betting-is-coming-to-iowa-this-summer-nebraskans/article_a5e10d7f-fc8d-57aa-9d45-3e29cff382d7.html.

[8]https://www.omaha.com/news/politics/bills/legalized-sports-betting-is-coming-to-iowa-this-summer-nebraskans/article_a5e10d7f-fc8d-57aa-9d45-3e29cff382d7.html; https://www.desmoinesregister.com/story/sports/2019/05/20/sports-betting-legal-iowa-app-where-bet-casino-how-gamble-college-pro-fantasy-draftkings-fanduel-nfl/3667712002/.

[9] https://www.desmoinesregister.com/story/sports/2019/05/20/sports-betting-legal-iowa-app-where-bet-casino-how-gamble-college-pro-fantasy-draftkings-fanduel-nfl/3667712002/.