Three More States Legalize Sports Betting
Last year was the year of sports betting, as the U.S. Supreme Court overturned PASPA, killing the law that made sports wagering illegal. A number of states jumped on the opportunity immediately, legalizing and regulating sports betting, launching the sports betting boom. Sports fans anticipated sports betting to wash over the United States this year, but 2019 got off to a slow start, even though many state legislatures have been looking at the matter. Have no fear – the drought ended this month, as three states have legalized sports wagering: Montana, Indiana, and Iowa.
Montana was actually one of the four states – along with Nevada, Delaware, and Oregon – that was grandfathered into sports betting after PASPA, but it never really had what we think of as traditional sports betting. Two bills were presented to Governor Steve Bullock, but he vetoed one, choosing to sign House Bill 725 on Friday May 3rd.
Under HB 725, the state lottery commission controls sports betting in the state; restaurants and taverns can install betting kiosks and mobile apps can be used on the premises with the authorization of the lottery. Senate Bill 330, which the Governor vetoed, would have allowed for a more customary setup, one in which private operators could operate sportsbooks and launch their own mobile apps.
Governor Bullock said that both models are possible in the future, but he preferred the lottery-based model right now, as he feels more comfortable with the established lottery commission being in charge and was concerned that things could get too chaotic with multiple operators.
In his veto letter, he wrote:
Under the Lottery model in HB 725, the state will have the ability to control, monitor, and protect sports wagering products and players through security and integrity protocols, policies around responsible gaming, and policies to ensure that sports wagering is competitive, transparent, and reliable. Like the private model, the Lottery model protects the taxpayer from risk. But the Lottery model builds on existing infrastructure and is projected to return significantly more revenue to taxpayers.
By contrast, the private model could risk favoring market entrants with the most resources to advertise and promote their products. In that environment, competition between well-heeled, international purveyors of gambling could lead to a fragmented market with competing sportsbooks spending most of their profits on acquiring players-leaving little margin for return to the taxpayer.
A few days later, Indiana Governor Eric Holcomb signed Senate Bill 552, setting the stage for sports betting applications to be accepted as early as July 1st. It was a piece of legislation that almost didn’t make it, as the Senate and House had trouble coming to an agreement on the details. Of particular conflict was mobile betting. The Senate passed the bill with mobile wagering included, but the House did not, changing it to only brick-and-mortar sports betting, a change that the Senate dismissed. Mobile betting is included in the final bill.
In a statement, the Governor wrote:
Gaming is a highly regulated industry that once had little competition, but now does from surrounding states and new technology. By modernizing our laws, this legislation will spur positive economic growth for our state and for an industry that employs over 11,000 Hoosiers. Additionally, it will bring in new revenue and create hundreds of new jobs – both permanent and in construction. I will direct the Indiana Gaming Commission to monitor for potential effects of this bill so that we can make necessary changes in future legislative sessions.
Sports betting became legal in Iowa on Monday, May 13th, when Governor Kim Reynolds signed Senate File 617. There is no delay in when the industry can begin, but nothing will happen for a while, as the regulations have yet to be penned. The bill passed fairly easily – Senate 31-18 and House 67-31 – but there was some uncertainty as to what Governor Reynolds would do.
Ultimately, it sounds like the decision came down to consumer safety, though revenue was likely a sizeable factor, as well.
“Gov. Reynolds believes that legalizing sports betting will bring this practice out of an unregulated black market. This law will regulate, tax, and police sports betting in a safe and responsible way,” Pat Garrett, a spokesman for the Governor, told the Des Moines Register.
The Iowa Racing and Gaming Commission will create the regulator structure for Iowa’s sports betting industry. The hope is that sportsbooks could open in late summer.
“For right now, nothing really has changed,” Iowa Racing and Gaming Commission administrator Brian Ohorilko told the Des Moines Register. “If everything goes smoothly, then I think it is reasonable to expect that bets will be taken before football season.”
Football season is always the target for states and betting operators, as NFL And college football are immensely popular for sharps and casual bettors alike. The Super Bowl is, well, the Super Bowl of sports betting.
The licensing fee will be $45,000 with $10,000 for renewals and the Iowa sports betting tax rate will be 6.75 percent. As is the case in many states with legal sports betting or online gaming, Iowa’s land-based casinos are the ones eligible for sportsbook licenses. Fees are higher in Indiana, with a $50,000 price on a license and a tax rate of 9.5 percent.
In Iowa, customers will not be allowed to wager online until they first register at a brick-and-mortar casino in order to confirm their identity.