Which Storyline Was The Biggest In The First Year Of Iowa Sports Betting?

Written By Derek Helling on August 14, 2020 - Last Updated on August 17, 2020

Saturday marks one year since legal sportsbooks first accepted wagers in Iowa. When retail, and then online, Iowa sportsbooks started taking action, it’s unlikely any of them could have predicted most of what has happened in the year since Aug. 15, 2019.

Because of all the activity, there are several contenders for what the biggest storyline of the year in IA in regards to legal sports betting could be. The following are a few of the strongest contenders.

The first epic Super Bowl LIII

The first contender is the most recent Super Bowl, LIII. Both of the contending teams had an Iowa connection that apparently motivated people to hit the books.

While there is no NFL team in the state, Kansas City is just a three-hour drive down I-35 (yes, that rhyme was absolutely intentional) from Des Moines. For that reason, there are many Chiefs fans in IA.

Kansas City had never hoisted the Lamar Hunt Trophy named after the team’s founder as AFC champs. In fact, the only time the Chiefs won a Super Bowl was 1969 when they defeated the Minnesota Vikings in Super Bowl IV.

That changed in January when Kansas City won a Super Bowl for the first time in half of a century. One of the stars on the losing team, the San Francisco 49ers, was former University of Iowa tight end, George Kittle.

That Kansas City karma and Kittle “kollective” led to Iowa residents and visitors placing over $6.5 million in bets on Super Bowl LIII. This is just the first example of Iowans having no qualms about betting on sporting events, however.

Two months that set the bar for handle in IA

As far as a black and gold standard (or cardinal and gold if you’re an Iowa State fan) for sports betting activity in a month’s time in IA, even February of this year can’t compete. The final two months of 2019 remain untouched.

Bettors in the Hawkeye State set a still record-high total of over $59.8 million in wagers last November. The same gamblers nearly hit that total again the following month, with December’s handle coming in at $59.3 million.

The two-month total of over $118.6 million is respectable, given the circumstances. January’s and February’s handles weren’t far off, coming in at about a million and three million less than December’s, respectively.

Running at nearly $60 million in monthly handle for four consecutive months, the prognosis for a strong March looked good. The Cyclones and the Hawkeyes were both in the AP Top 25.

Then, as we all know now, the wheels came off. That leads into our next sports betting epic.

Three months of casinos being shut down

St. Patrick’s Day didn’t bring its usual luck for IA casinos and sportsbooks this year. That was the day that Gov. Kim Reynolds ordered them all shut indefinitely at the start of the COVID-19 pandemic.

The total shutdown endured until June 1, with some IA properties taking even longer to reopen under the new restrictions. Accordingly, sports betting activity took a nosedive.

March, April and May produced a total of just $28.1 million in wagers. For perspective, September of last year produced more than $38.54 million in handle.

That was with just 15 of the 19 casinos taking retail bets and before DraftKings launched in IA. Fortunately, the latest numbers suggest recovery, with handle back up over $22.85 million.

While total handle for Iowa’s first year is obviously far less than it would have been without the pandemic, it’s not the only factor that played a part in diminishing returns for the first Iowa sports betting anniversary. Some of the mitigating factors were self-inflicted.

Four non-pandemic factors that limited growth

The first of these four made the pandemic even more of a negative factor. When Iowa legalized online sports betting, it did so with an in-person registration requirement that is still in effect until New Year’s Day 2021.

That mandate stayed in effect while casinos were shuttered. For that reason, from March 17 to June 1, only those bettors in IA who had already registered could place wagers, and only with those sportsbooks they’d already registered with.

The legislature made another misstep in its statute. In the opinion of IA Attorney General Tom Miller, IA law does not allow licensed operators to take bets on esports.

Looking into the future, that might make a huge difference as esports continue to grow. That’s why the IA Gaming Association and others are going to push for a legislative fix to the problem in the form of a new act explicitly authorizing esports wagering.

The third and fourth factors that limit IA’s growth in this industry are interconnected. Those are Iowa’s largely rural population and a lack of major professional sports teams within its borders.

The sparse population magnifies the effects of the in-person registration mandate. Also, the fact that the most popular sports teams in the state are college teams limits the number and type of prop bets that sportsbooks can accept.

The story of Iowa sports betting anniversary isn’t all gloom and doom, however. The final contender for the biggest story of the year is about the state’s envious position in the industry right now.

Five neighbors who have yet to jump on the bandwagon

The Hawkeye State counts six states as its neighbors. So far, five of them have yet to even legalize sports betting, much less actually launch legal sportsbooks.

Minnesota, Missouri, Nebraska, South Dakota and Wisconsin are those five states without legal sportsbooks. Over the past year, that’s meant residents of those states have crossed the state lines into IA.

That situation may not endure forever, however. South Dakotans will vote on whether to allow brick-and-mortar wagering this fall. Additionally, there was significant momentum toward legalization in the last legislative term in Missouri.

Whether that will spill into a greater movement to legalize in MO remains to be seen, but what’s certain is that IA sportsbooks had no qualms about pulling action from residents of other states.

The first year of legal sports betting in Iowa has definitely had its ups and downs. That looks to be the case as the second year begins as well.

While sportsbooks can look forward to the expiration of the in-person registration mandate, new competition from Illinois sportsbooks and the continued uncertain status of sporting events temper excitement. What’s clear, however, is that the gambling industry in IA is better off because legal sportsbooks exist in the Hawkeye State.

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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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