Iowa Bets the House

Minnesotans really seem to enjoy making fun of Iowa. Ask a Minnesotan about Iowa, and their usual comment seems to be “There isn’t much there… just a lot of corn.” (which doesn’t seem to be entirely false).

Gopher fans will even chant “Who hates Iowa? We hate Iowa!” at TCF Bank Stadium after another loss to the Hawkeyes. This chant, I suppose, is more specifically aimed at the university, but I think it flows through generally into the entire state.

After hanging out in Des Moines for the NCAA Tournament, I have to say I had nothing against Iowa and think I would go back… And if a bill that is working through the Iowa government is passed, I think you’ll find a lot of Minnesotans asking for forgiveness from Iowan’s.

Iowa currently needs one final signature from Governor Kim Reynolds to pass a bill to legalize sports gambling throughout the state. Iowa would be the ninth state to pass some form of sports gambling since the government allowed states to decide for themselves last May.

Iowa’s version of the gambling law would allow betting on most professional, college and international sporting events through Iowa’s 19 state-regulated casinos. It would also permit bets through online betting platforms like FanDuel and DraftKings. Betters would have to be at least 21 years old.

Passing through Iowa’s state House 67-13 and it’s Senate 31-18, momentum is moving towards passing, although Governor Reynolds has not indicated whether she would sign it into law. The state would profit 6.75% on net receipts, which could be a staggering increase in tax revenue.

The other eight states all have used different formulas to moderate the gambling. Tax rates on revenue vary from state to state and by the medium used. For example, Delaware collects 50% of the revenue and Casinos take 40% while Mississippi and West Virginia have a flat tax rate like Iowa is proposing (12% and 10% respectively). Meanwhile, New Jersey has different rates for land-based (8.5%), casino-based online (13%) and racetrack-based online (14.25%).

Las Vegas, the hub of sports gambling, is a simple 6.75% tax rate on all land-based sports betting revenue. Vegas will handle $400 million in bets in a given month which nets both the casinos and the state large profits. The other states have steadily increased their handle month over month with New Jersey being the only state to eclipse $100 ($385 in January of 2019).

If Reynolds signs the Iowan bill, bets could be placed as soon as July 4th. However, the appropriate systems probably wouldn’t be integrated to use fully until August.

There has been some push back against sports gambling, although it does not seem to align with either political party. The largest argument is about the social impact sports betting can have on a community. States often see stark rises in gambling addictions and it can definitely wreak havoc on many individuals.

However, with how progressive this country is becoming, it will only be a matter of time before all 50 states are passing laws to allow betting. Minnesota, in classic passive Minnesota fashion, will probably be the 25-30th state to pass such laws.

Meanwhile, starting in August, Iowans will probably observe many Minnesotans sneaking across the southern border to quick drop $100 on the Vikings to win the Super Bowl at 22/1 odds, only to never see that money again.

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