How Iowa Got Legal Sports Betting
Sports betting officially became legal in the Hawkeye State on Monday, May 15, 2019. Governor Kim Reynolds signed into law sports betting bill SF 617.
Under the bill, all 19 of Iowa’s casinos can apply for a sports betting license. The biggest part of the bill is allowing for online and mobile sports betting. However, those looking to bet online must first register for an account in person at the casino they wish to bet with. The good news is that the requirement will end on January 1, 2021.
The Iowa Racing and Gaming Commission still has some work to do in terms of rules for sports betting. They do believe that sports betting will be up and running in the state in July or August.
What Kind of Market to Expect in Iowa
Iowa may not find the same success as the top sports betting states like New Jersey and what Pennsylvania (Pennsylvania online sports betting is about to go live) is expected to be. That doesn’t mean they won’t see big numbers though. If we look at population, Iowa has a population of over 3 million, compared to over 8 million in New Jersey. Pennsylvania has a population of over 12 million. However, thanks to neighboring states, mainly Nebraska (nearly 2 million), Iowa will see some sports betting traffic in their casinos and on their apps. Nebraska residents spend over $320 million a year in Iowa casinos.
According to the Des Moines Register here is how the tax revenue from gambling compares across the states in question:
Iowa: $477.5 million
New Jersey: $1,308.5 million
Pennsylvania: $2,613.4 million
Interestingly, the amount spent per Adult in Casinos is much higher in Iowa:
New Jersey: $374
An important note is that online sports betting is much different than physical casino betting or physical sportsbooks. Mobile sportsbook apps will open up the industry to a new audience.
With the majority of the Nebraska population being on the eastern side of the state, Iowa has the opportunity to attract a large out-of-state market. Cities like Lincoln and Omaha are only a short drive from Council Bluff, where there are three casinos.
Once mobile sports betting is operating in the state, residents from Omaha, Lincoln and the rest of Nebraska will only have to cross into Iowa to place a bet. Once they sign up at the casino of their choice, they will never have to set foot in the casino again to bet. When across state lines, Nebraska residents can simply pull over in their cars, log on, and place their bets. This gives Council Bluff and other border city casinos a huge advantage over casinos located in central Iowa. Out of state residents are more likely to sign up at casinos closest to the border as opposed to traveling further into Iowa to register an account.
While the rest of the country saw an average of a three percent increase in commercial casino revenue from 2017 to 2018, Iowa only saw an increase of 0.3 percent. The inclusion of sports betting this year will certainly help Iowa catch up with the rest of the country.
Future of Iowa Sports Betting
The new law allows for each casino to apply for two “skins”. That means each casino could possibly have two different sports betting applications. Therefore Iowa could see as many as 38 different sports betting apps.
You can expect to see the big names like FanDuel Sportsbook and DraftKings Sportsbook to get operational in Iowa as well. FanDuel has teamed up with Boyd Gaming, while DraftKings is partnered with Caesars. Both companies have casino properties in Iowa. Even the newly established FOX Bet Sportsbook can get a quick start in Iowa. Eldorado Resorts is partnered up with The Stars Group, who is one half of the FOX Bet group. Eldorado’s Isle Casino Hotel Bettendorf is located in Iowa.
We already know that Nebraska residents have accounted for a lot of revenue for Iowa in the past. They’re not the only ones. Iowa shares a border with six different states, none of which have legal sports betting. The longer it takes those states to hop on board the legal sports betting train, the more Iowa will reap the benefits. Some experts believe that a fully mature Iowa sports betting market can generate over $4 billion in sports betting handle. With the inclusion of six other states residents, that number may very well be a possibility. Iowa is in position to be the sports betting capital of the mid-west.