Iowa will consider sports betting in wake of U.S. Supreme Court ruling

The Iowa Legislature will consider a bill to legalize sports betting statewide next year in the wake of Monday's U.S. Supreme Court ruling that strikes down a federal ban on sports wagering.

State Rep. Jake Highfill, R-Johnston, told the Des Moines Register on Monday that he will definitely introduce a proposal when the Legislature convenes in January to allow wagering on college and professional sports events.

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"This is already happening, and this will be a great way for states to get a handle on it," Highfill said. "If you think that putting our heads in the sand and wishing it will go away will stop it, it is not."

The U.S. Supreme Court, in a 6-3 ruling, upheld a 2014 state law in New Jersey that allows sports betting at New Jersey casinos and horse tracks. The court also struck down the federal 1992 Professional and Amateur Sports Protection Act, which effectively banned sports wagering in most states, including Iowa. Nevada was exempted from the law, while three other states — Montana, Delaware and Oregon — were allowed to operate sports lotteries.

"The legalization of sports gambling requires an important policy choice, but the choice is not ours to make," Justice Samuel Alito wrote in the majority opinion.

The American Gaming Association, a national casino trade group, has estimated that sports fans annually wager at least $150 billion illegally, including nearly $90 billion on National Football League and college football games.

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Drake University law professor Keith Miller, who has co-authored a book on gambling law, said the high court's decision was an "emphatic takedown" of the federal ban on sports betting.

"Now, states are free to pass laws, and Iowa could pass a law to authorize sports betting," Miller said. "The only thing that could be a fly in the ointment would be if Congress decided to get involved. Congress could forbid sports betting nationally or it could establish a federal system for it. But most people doubt that is coming anytime soon — if at all."

What's next in Iowa?

Some states had passed legislation in recent months in anticipation of a favorable Supreme Court ruling with the goal of quickly setting up a sports betting industry.

Iowa officials said they will be watching developments in neighboring states — particularly Illinois. A consultant has estimated Illinois could generate $68 million annually in new revenue by legalizing sports wagering.

Brenna Smith, press secretary to Iowa Gov. Kim Reynolds, issued a statement in the wake of the court's decision: "Given the Supreme Court's opinion, the governor will explore options with the Legislature next year," she said.

Wes Ehrecke, president of the Iowa Gaming Association, which represents the state's commercial casinos, said he will "absolutely" be lobbying lawmakers to legalize sports betting on college and professional sports that would be regulated by the Iowa Racing and Gaming Commission and operated through the state's casino industry.

"I am optimistic that there will be good, bipartisan support to get the bill passed," Ehrecke said.

Iowa has 19 state-regulated casinos that could be involved if sports books are authorized by the Legislature. There are also three casinos operated by Native American tribes in Tama, Sloan and Onawa that would likely move to offer sports wagering if it's allowed under Iowa law.

Gary Palmer, president and chief executive of Prairie Meadows Racetrack and Casino in Altoona, which had 3.1 million admissions and an adjusted gross revenue of $190 million last year, said he would welcome the opportunity to offer sports betting.

"We have been working on this with our legislators, trying to educate them about it," Palmer said. "It would be a nice amenity to have and people could have fun with it, although it wouldn't be a big revenue generator, by any means. So we are in favor of it as long as we don't get taxed out of doing it because it would operate on a small profit margin."

Trouble with legalizing in Iowa?

But Tom Coates of Norwalk, an opponent of gambling who heads a consumer credit counseling service, said he has no doubt that legalizing sports betting will lead to more problems for people who are addicted to gambling. These troubles can lead to bankruptcies, divorces and suicides, he said.

"There are a lot of people walking around right now who don't know they have this problem," Coates said. "They haven't had the accessibility, but if you increase accessibility and availability, you will have more of it.

"I am sorry that this has happened, but I kind of expected it to happen."

During the recently adjourned session of the Iowa Legislature, lawmakers considered a bill to legalize sports wagering in the event the U.S. Supreme Court struck down the federal ban. But Iowa legislative leaders were reluctant to proceed with the legislation without a decision by the high court.

House Study Bill 592 was drafted with the intent of allowing Iowa gamblers to establish sports wagering accounts at Iowa's casinos. Gamblers could participate either by visiting Iowa casino sports books or by placing wagers online, including on their smartphones.

The National Basketball Association and Major League Baseball registered in opposition to the bill. Representatives of both the NBA and MLB suggested the proposed Iowa measure falls short of what's needed to protect the integrity of sports betting.

Gambling industry lobbyists said the dispute over the Iowa legislation appeared to focus on whether major league sports would be guaranteed a slice of profits for a so-called "integrity fee," rather than whether Iowa wagering on sports should be legalized. Iowa's casino industry said the proposed major league sports fee was unrealistically expensive and would make Iowa sports books unprofitable.

Jamie Pollard, athletic director at Iowa State University, said he expects "a very robust discussion" of the merits and challenges of gambling in Iowa.

"We also understand several states have or are considering a nominal integrity fee that would be used to assist their institutions with the additional costs that would be incurred to ensure compliance with gaming laws," he said. "I would hope legislators in the State of Iowa would consider a similar fee to protect the University of Iowa, Northern Iowa University, Drake University and Iowa State University."

Brian Ohorilko, administrator of the Iowa Racing and Gaming Commission, said the commission will be gathering as much information as possible in the coming months about legal sports wagering. This will include laws and regulations being adopted in other states that proceed to authorize sports betting, he said.

"We want to be ready to go if the Legislature decides to pass a bill and if it were to be signed," Ohorilko said.