Iowa’s In-Person Registration Requirement Makes Bad Situation Worse For Sportsbooks

Posted By Derek Helling on April 24, 2020

What fouls up Iowa’s in-person registration requirement for legal online sports betting? The state’s government mandate that shutters the necessary facilities.

That’s the situation in the Hawkeye State right now. The coronavirus pandemic has made an already undesirable situation for the state’s sportsbooks even worse.

What is Iowa’s in-person registration requirement for online betting?

To be clear, Iowa Gov. Kim Reynolds did the right thing when she shuttered all of the state’s casinos. The lives of casino patrons and workers are more important than sportsbook handle or tax revenue for the state.

IA legislators made the real mistake well before COVID-19 reared its ugly head. The Iowa Legislature enacting a sports betting law that required people who wished to bet online to register for their accounts in person was a poor choice.

Proponents of the measure sold it as a device to ensure bettors are of legal age and aren’t on any self-exclusion lists. While it may serve those purposes, it’s essentially a concession to the state’s brick-and-mortar casinos.

The move forces IA bettors into those facilities at least once. The casinos hope that they will make deposits and play other games while they’re on-site.

The mandate sunsets on Jan. 1, 2021. On New Year’s Day and from there forward, IA residents and visitors can conduct the entire registration process for online sportsbooks over the internet.

Like anyone else, IA legislators didn’t foresee a viral pandemic that forced the state’s casinos to close. However, this tenet of the law was already flawed on other merits.

Sports betting handle has taken a dive, and this requirement is a big part of the problem right now. While there’s no going back to undo the damage, this can be a lesson for other jurisdictions.

Why the requirement has been a bigger negative in the current situation

Right now, the only people who are able to bet online are those who had already registered prior to the casinos shutting down. Bettors in IA who didn’t make it to a casino in time effectively can’t legally wager right now.

It’s hard to quantify exactly how much of an impact this has on sports betting in IA at this time. The drop in handle is due to many other factors like Iowans facing a loss of income or choosing to spend their income in other ways.

What’s clear is that the state has seen a massive drop-off in this activity. In March, all of IA’s sportsbooks took in a combined $19.57 million in handle.

February’s handle was nearly $57 million. Obviously, the fact that February contained Super Bowl Sunday inflated that number, but March also contained the lead-up to the annual NCAA DI men’s basketball tournament.

If there was no such requirement in place right now, all the bettors in IA who wanted to take part in online wagering would be free to do so. That might have meant more action at the state’s books last month and right now.

That, in turn, would have brought more tax revenue to the state. The state took in just over $79,000 in March, in that regard, but this month could be worse.

As other states around the country consider legalizing sports betting within their borders, this situation can show why in-person registration requirements are bad policies. Hopefully, there will never again be a need to shutter casinos. Still, if there ever is, such jurisdictions will be better suited to handle that situation than IA was this time.

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Derek Helling

Derek Helling is a freelance journalist who resides in Chicago. 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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