House Study Bill 227 was recently filed by Rep. Bobby Kauffman in the Iowa General Assembly. If passed, it would allow online casino gambling in The Hawkeye State. The measure is not expected to get a vote this session.
It’s likely that Kauffman’s ultimate goal with HSB 227 is to increase awareness of online casino gambling, as the bill was probably filed too late in the General Assembly session to gain passage.
Purpose of HSB 227 could be to build momentum on online casino issue
It was hoped that the successful launch of online sports betting would pave the way for Iowa online casinos in Iowa. So far, that hasn’t happened. As of now, Iowans can play legal casino slots and table games online at only sweepstakes casinos that do not use real money.
Kauffmann sponsored a similar proposal on online casino gambling in 2022, HSB 604. That one did not make it very far. It did progress out of committee but was never brought to a vote.
HSB 227 will probably suffer the same fate. The Iowa General Assembly adjourns on April 28. Gambling analyst Matt Kredell of PlayUSA recently pointed out that the bill was filed too late in the session to get passed.
“If Rep. Kaufmann thought he could make a push for Iowa online casino this year, he would have started the effort earlier. By refiling the bill at this late date, he hopes to educate colleagues on the issue and build momentum for the future.”
Iowa Gaming Association President and CEO Wes Ehrecke believes Kauffman is filing the bills to simply continue the discussion and also to educate legislators.
“It’s one of those that’s going to take a few years of awareness and education.”
The nuts and bolts of HSB 227
The key aspect of HSB 227 is to allow advance deposit wagering. This would allow users to fund their online gambling accounts prior to placing bets. It would be the first step to legalizing online casino gambling.
The bill would allow casino operators to host their sites under a maximum of two skins. The Iowa Racing and Gaming Commission (IRGC) would then have the authority to authorize a third skin. This could potentially allow up to 57 online casinos.
HSB 227 would also authorize the IRGC to come up with a set of rules for online poker to allow Iowa to enter in multi-state player pools. Michigan did that earlier this year with New Jersey.
Also included in the bill is allowing existing sports betting licensees to obtain online casino gambling licenses. Patrons would be able to use their existing sports betting accounts to gamble at an online casino.
HSB 227 outlines licensing fees but does not address tax rate
Online casino companies would pay an initial licensing fee of $45,000 under HSB 227. The cost of renewal would be $10,000 annually.
HSB 227 makes no mention of a proposed tax rate on online casino gambling revenue. It is safe to assume it would be in line with Iowa’s 6.75% sports betting tax rate. This rate is the lowest among all US states with legalized sports betting. Nevada is the only other state with this tax rate.
There are currently only six states with legal online casino gambling:
- New Jersey
- West Virginia
Of the $4.4 billion in handle for sports betting in Iowa in fiscal year 2022, 89.2% of that was done electronically via mobile wagering.