IRGC Delays Potential Approval Of Esports For Fantasy, Wagering Until Its June Meeting

Written By Derek Helling on April 17, 2020
esports approval

Iowans looking to legally play League of Legends fantasy contests or bet on the outcome of LOL matches will have to wait at least a couple more months. On Thursday morning, the Iowa Racing and Gaming Commission shelved an esports approval request.

The new best-case scenario is the IRGC will approve such events in June. The IRGC’s decision is indicative of the lack of knowledge about the industry that pervades regulators around the country.

Why the IRGC delayed responding to the esports approval request for now

Simply put, commission members didn’t feel they had gathered enough information about whether the contests fit within the state’s legal definition of allowable events for either fantasy or sports betting platforms. The matter was on the agenda for Thursday’s meeting due to a request from DraftKings.

DraftKings only sought approval from the IRGC for fantasy contests. A representative from the Iowa Gaming Association expressed his sentiment that he hoped the commission would approve esports for sportsbooks as well, however.

Opinions differed on whether esports are allowable under IA law. The counsel for DraftKings stated he believes they do because like traditional sports, they have governing bodies and require intense training for participants, who are highly skilled.

Although the commission didn’t deny the request, there’s no guarantee that it won’t do so in June. The fact that it gave its members about two months to study the issue further means a definitive decision should be coming that month.

While that decision may be in the affirmative then, it’s short-sighted now. It denies gaming operators in the state access to a viable product they could offer to customers right now and has other implications as well. It comes down to lacking information about esports.

Why the Commission’s ignorance on this issue represents a loss for several parties in Iowa

Esports are one of the few global, live competitions ongoing during this coronavirus pandemic. Because of that, fantasy games and sportsbook operators have cranked up their activity on the most popular events and leagues.

Other jurisdictions in the United States have accommodated those interests. For example, Nevada approved three more events for its online sportsbooks to take action on just this week. As a matter of fact, IA is currently the only state with legal online sports betting that to this point hasn’t authorized any esports wagering at all.

By preserving that fact until at least June, Iowa’s online gambling operators are losing out on handle right now. That means the state is also missing out on tax revenue. Waiting to make a decision until you feel confident isn’t a bad idea, of course.

However, the commission could have given DraftKings and other operators some room to maneuver and still been cautious. For example, it could have only temporarily approved one event and then assessed the situation in June.

The demand for esports fantasy and betting in IA is uncertain. At the same time, operators like DraftKings likely aren’t counting on it to replace the action they would normally see from MLB and NBA games right now.

For them, these events are more about having some product to offer their customers to hopefully keep them engaged. They may get clearance to enact that strategy in June. In the meantime, IA fantasy and sports betting sites have to look elsewhere.

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Derek Helling

Derek Helling is a lead writer for PlayUSA and the manager of BetHer. He is a 2013 graduate of the University of Iowa and covers the intersections of sports with business and the law.

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