Iowa Lottery Could Prime The Pump For Changes To Gambling Law In 2021

Posted By Derek Helling on December 23, 2020

The new session of the Iowa Legislature starts on Jan. 11, and there’s a lot on the agenda for the IA gaming industry.

The Iowa Lottery plans to propose two additions to the state’s operational code that will affect those who win the lottery’s cash prizes. Furthermore, other parties involved in the gambling industry in the Hawkeye State will follow suit.

What the Iowa Lottery legal changes would mean

One of the alterations is for clarity’s sake, while the other aims to discourage illegal behavior. However, both are subject to the approval of the state legislature.

The IA Lottery’s first request is an additional line in the state code that explicitly states the lottery only has to award prizes for tickets purchased legally. According to Mary Neubauer, the lottery vice president, this is already the case, but there’s not obvious language.

“At the lottery, if you win a prize, there is an automatic check of the income offset database of the income offset database when you come in to collect the prize. And that debt is automatically taken out before we issue a check to the winner.”

The other change is the expansion of criminal penalties for people who try to skirt debt payments out of lottery winnings. This situation comes up when a lottery winner owes back taxes or other debt to the state.

The Iowa Lottery checks the state database and deducts the value of any such debts from lottery winnings. Although it’s illegal, sometimes winners try to evade the debt by having another person claim the prize for them.

Right now, the penalties for doing so only apply to the winners. The lottery wants to expand penalties so accomplices will face criminal charges as well. Neubauer continued:

“For example, they might give the ticket to a friend and have the friend come in to claim a prize rather than the original person being the one to claim a prize. And section three of the bill would have the penalties involved for that apply to both the person who would be passing the ticket to a friend — as well as the friend.”

It’s uncertain whether the legislature will approve either change. These may not be the only matters before Iowa legislators when it comes to gaming next year.

Drafts, esports, online casinos and online poker?

Other changes to the code might include the expansion of the events that legal sportsbooks in Iowa can take bets on. Additionally, the expansion of online gambling might surface.

Last year, DraftKings and the Iowa Gaming Association (IGA) sought approval from the Iowa Racing & Gaming Association (IRGC) to take wagers on esports; however, the IRGC denied that request.

The commission said that it didn’t find esports to fit the statute for allowable events. In response, the IGA intends to push for a revision of the statute to allow for esports.

The same might go for events such as the NBA Draft and NFL Draft. IA law, in its current form, doesn’t allow sportsbooks to take action on those popular events either.

The biggest potential change for 2021, however, would be expanding online gaming. Authorizing online poker, slots and table games would put IA on the same level as the most permissive gambling states in the country.

While there isn’t a big public push for that right now, if the IA Lottery is successful in getting what it wants from the legislature next year, that success might inspire other groups. The year 2021 could be busy for gambling lobbyists in IA.

Photo by Rogelio V. Solis / AP
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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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