Why Part Of The Iowa Sports Betting Law Is On Hold

Posted on August 26, 2019 - Last Updated on December 3, 2019

For the rest of 2019 and into 2020, people who take advantage of legal sports betting in Iowa won’t have to worry about collections activity reducing winnings. An Iowa sports betting legislative delay saw to that.

It’s common for people with certain debts to have gambling winnings reduced in repayment of those debts. That won’t apply to sports betting winnings in the Hawkeye State for the immediate future.

Why the Iowa sports betting legislative delay happened

Just two days prior to the beginning of legal wagering on sports in the state, the Iowa Administrative Rules Review Committee put part of the state law governing that on hold.

Casinos requested the delay due to procedural concerns. There are federal laws governing how certain debts may be collected from prize winnings.

The casinos argued that regulations laid out by the Iowa Racing and Gaming Commission didn’t comply with federal law. Casinos now won’t have to undertake that task until sometime next year.

The onus is now on the IRGC and the Iowa legislature to create new regulations on the topic. It’s likely that won’t happen until early 2020.

What the sports betting delay does and doesn’t mean

The delay doesn’t mean those who owe back taxes to a state or the Internal Revenue Service¬†should bet without fear. People with criminal debt or child support owed are in the same situation.

Parties other than casinos are still free to pursue all or part of such winnings in civil and/or criminal court proceedings. That could include the federal and state governments.

The delay also doesn’t apply to winnings from slots and table games. The delay does not affect Iowa Lottery winnings either.

All the delay means is, for now, casinos won’t be trimming sports betting winnings to apply payments to those debts. That will change in the Hawkeye State once rules are final.

It also doesn’t mean that residents of and visitors to Iowa who bet online are in the clear. The state will treat those books the same.

What about online-only sportsbooks in Iowa?

The Iowa law does allow for sportsbooks that aren’t tethered to a casino in the state to eventually accept wagers in the state. Iowa sports bettors should note that any winnings from such books won’t be treated any differently once the new regulations are in place.

Sports betting winnings are sports betting winnings whether they come from a casino or an online-only operator. That means that once the rules are good to go, any winnings from such a wager paid out to people with such debts could be forfeit.

There is a silver lining for people who have such debts in this situation. The delay gives them time to settle those debts before sports betting winnings would be trimmed.

This move was primarily made to ensure Iowa casinos are in compliance with federal law before requiring them to collect debts on sports betting winnings. The “grace period” for bettors is a byproduct.

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Derek Helling

Derek Helling is a freelance journalist who resides in Kansas City, Mo. 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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