The possibility that Iowa sports betting was coming soon already existed. A new Penn National Gaming deal involving the Hawkeye State makes that much more imminent.
The deal brings some of the biggest brands in sports betting to Iowa, as well. It also signals a major investment in sports betting in Iowa by those companies.
Details of the Penn National deal for Iowa
Penn National Gaming, which operates the Ameristar Casino Hotel in Council Bluffs, has announced a market-access and sportsbook operations deal with five partners.
The five companies are:
- The Stars Group
The biggest winner out of those five could be Kambi.
Kambi is based in the United Kingdom and provides infrastructure like software for sportsbooks. It will provide operational support for Penn sportsbooks in Iowa and other states going forward.
In a press release, Kambi stated it expects its first Penn land-based books to open in the third quarter of this year. That means next month is a target date.
Other parties in the deal such as theScore also come out winners.
Iowa sports betting market is one more for theScore
In exchange for 4.7% in equity and agreeing to share its sportsbook revenue in the Hawkeye State with Penn, theScore gets priority to an online skin for Penn’s license with the state.
That means when online sportsbooks do launch in the Hawkeye State, probably sometime next year, it’s now a safe bet that theScore will be among the options.
That doesn’t mean the other parties in the deal will be left out in the cold, however.
Opportunities for other operators in the Hawkeye State
PointsBet already has a pending presence in the state via its deal with Burlington’s Catfish Bend Casino. It’s possible other companies could make similar deals.
The Stars Group and DraftKings aren’t married to Penn in this deal. Like PointsBet, they are free to close similar deals with other casinos in Iowa.
It’s also possible that DraftKings could “go it alone” as an online-only operator in the Hawkeye State. That would give other operators a head start, however, as land-based sportsbooks will open before mobile betting launches.
There are 19 casinos in the state, and only seven of those have announced sportsbook plans to date. That leaves plenty of opportunities for DraftKings to get in on the action.
Attractive aspects of the Iowa sports betting market
While Iowa is far from the most populous state and it is bereft of any major professional sports teams, the Hawkeye State does have some attributes that make it attractive to sportsbook operators.
The first point of attraction is obvious. Iowa is currently one of the few states with pending legal land-based and online sports betting.
As that number grows that attribute will become less of a draw, but for now, Iowa’s pace to market is a big selling point.
Iowa also offers one of the lowest tax rates on sportsbooks out of the states that have legalized sports betting. Sportsbooks in the Hawkeye State will pay just 6.75% of handle to the state, a mere fraction of Pennsylvania’s 36%.
Even if there isn’t a huge population in the state, Iowa’s early presence and sportsbook-friendly tax rate make it worth the investment. Kambi and theScore hope to realize that investment thanks to Penn.