Iowa's Promising Sports Betting Legislation Signed Into Law | Citizens Against Government Waste
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Iowa's Promising Sports Betting Legislation Signed Into Law

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


On the one-year anniversary of the Supreme Court decision to legalize sports betting, the Hawkeye State has delivered another exciting reason to celebrate.

Yesterday, Gov. Kim Reynolds (R-Iowa) signed SF 617 into law, making Iowa the ninth state to fully legalize sports gambling.  In comparison to other proposals weighed by the legislature, this law provides a strong base from which the legalized sports betting market can thrive in Iowa.  This includes a tax rate of 6.75 percent, which is very reasonable considering Pennsylvania and Rhode Island’s more than 35 and 50 percent rates, respectively.  Perhaps most important is what the bill does not contain.  Iowa followed the example of other states with legalized sports betting and left integrity fees, or royalties for billion-dollar sports leagues, out of the legislation.  To this point, no state with legalized sports betting has such a fee.  The bill also leaves out any explicit government mandates that would have required sportsbooks to purchase data directly from the leagues.

Since the Murphy v. NCAA decision one year ago, 38 states have introduced sports betting legislation.  It should be no surprise that sports betting has become one of the hottest topics in the halls of state legislatures across the country:  legalized sports gambling has a betting handle of $8 billion that has generated $55.3 million in new state and local tax revenue.

While states have done well to keep this budding market as bettor and competition-friendly as possible, sports leagues refuse to back down from finding ways to get in on the action.  Even though no state with legalized sports betting has made the mistake of including an integrity fee, several states close to legalization, such as Connecticut and New York, are still considering adding such a royalty.  Tennessee’s legislation was the first state to acquiesce on government league data mandates, and Illinois may be soon to follow.   Recent reports also indicate that leagues are finding new, forceful ways to get their cut, going as far as threatening to pull their data from Las Vegas sportsbooks unless a fee is paid to them.

The one-year anniversary is not only a time to celebrate an important milestone for the legal sports betting community, but is also a time to reflect on what should be a template for states looking to craft successful sports betting legislation.  The answer is simple:  states should safeguard free-market principles and reject harmful tax hikes or regulations.  Although the most recent, Iowa’s sports betting law is an encouraging outcome that should be a useful example for future sports betting laws throughout the country.

 

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