Gambling And Online Poker In The State Of Iowa


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Iowa Senate Approves Online Poker While House Fails To Vote On The Measure

iowa sealWhen most people think of Iowa, they think of corn. And while it remains a fact that Iowa is the largest producer of corn in the United States, it might come as a surprise that hard-working Iowans also enjoy a good game of poker.

And with recent proposed legislation passing through the state’s House, the same farmers that give the U.S. all the corn it can eat are the same folks who were almost on the verge of being able to enjoy that poker game in their own homes–online. Unfortunately, the proposal that would have allowed intrastate online gambling in Iowa advanced no further and is considered dead for 2012.

Like the handful of other states with similar proposals under consideration, the Iowa legislature chose to take a harder look at legalizing online gambling after the U.S. Department of Justice’s December 2011 ruling that the Wire Act of 1961 applies only to sports betting. By March, the bill, known as Senate File 2257, flew through the Democrat-controlled Senate by a 29-20 vote. The bill would have created the regulatory authority that would oversee all aspects of online poker being run by existing casinos. However, the Senate’s swift action apparently took its colleagues in the Republican-controlled House of Representatives by surprise.“We really didn’t expect it to come over (from the Senate),” House Chairman Peter Cownie said. Despite studies showing the potential for Iowa casinos and online operators to rake in $30 to $60 million, of which between $3 and $13 million would go to the Hawkeye State in tax revenue, House members didn’t seem interested enough to even take a vote on the measure, effectively killing the bill for this year’s legislative session.[1]

Perhaps legislators in the House took into consideration a report issued by the Iowa Racing and Gaming Commission that showed a “reduced revenue projection” that whittled the state’s expected revenue from up to $35 million per year to an estimated $13 million maximum. The higher numbers came from US Digital Gaming, the California-based company looking to “operate an internet poker hub in Iowa.” The gaming group based the higher set of figures on its estimation that 150,000 Iowans participate in online poker and also conducted its study prior to Black Friday, the day in April, 2011 that the U.S. Department of Justice seized the domains of the top three Internet poker sites, devastating the online poker industry. “I’m not going to quibble over higher numbers,” said Sen. Jeff Danielson, the primary proponent behind the push for online poker legislation. “Even the more conservative figures should be enough to get the attention of Iowans.”[2]

By April 2012, Danielson admitted that Iowa lawmakers weren’t seeing eye to eye on SB458, which it is now called. Danielson has hopes that the retooled bill will bring clarity to those in the Iowa legislature who dissent. “I just think people need a clearer picture of the evidence and I don’t think they’re ready in this session to legalize it. So we want to give them the best information possible as we go into next year.” But Iowa House Republicans will prove to be a tough sell, mostly because of the uncertainty still involved with legalized online gambling, with Nevada the only state to actually pass legislation thus far, and their online poker sites not yet being up and running.[3]

Gamblers Considered Vagrants To The Lottery–Iowa’s Long Gambling History

Settlers first appeared in what is now Iowa in 1833. Before that, the area was inhabited by Native Americans and European traders. But settlers began arriving from Ohio, Pennsylvania, New York, and other states. When they got there, the settlers were introduced to the gambling habits that came from Missouri’s territorial days. The settlers gambled despite the Missouri Territorial Legislature’s 1814 law forbidding the act. But Iowa settlers didn’t have to deal with anti-gambling legislation until 1838. Iowa became a U.S. territory the same year gambling was declared illegal, but Iowa actually created its own law that made gambling debts collectable. And, interestingly enough, in a state that allows just about every form of gambling, Iowa was “the first Midwestern jurisdiction to declare that any person who ‘does or is suspected to get his livelihood by gaming’ was a vagrant and subject to imprisonment.”[4]

As time went by, Iowans knew gambling was here to stay, and regulation of such activities would be wiser than to allow them to go on unlawfully. By 1983, the Iowa legislature passed the Pari-Mutuel Wagering Law, which allowed organizations that had the right qualifications to apply for licenses to conduct pari-mutuel wagering on horse and dog racing. Shortly thereafter, Iowa’s first Racing Commission was appointed in July, 1983. A year later, the commission granted licenses to the Racing Association of Central Iowa, the National Cattle Congress, and the Dubuque Racing Association, allowing the trio to open thoroughbred racetracks in Bondurant, Waterloo Greyhound Park in Waterloo, and Dubuque Greyhound Park, respectively. A fourth license was issued to Iowa West Racing Association, which opened Bluffs Run in August, 1984.

By July 1989, the commission expanded pari-mutuel wagering by enacting laws making betting on simulcast races legal. That same summer, legislation passed allowing organizations that met the criteria to operate excursion gambling boats in counties where such activity passed by approval of a referendum. Of the nine counties to put the referendum up for vote, only one failed, and thus Iowa’s history of excursion boat gambling was born. Today, fifteen gambling boats are in operation.

In 1992, the Director of the Department of Inspections and Appeals completed negotiations creating three Native American Indian Tribal Gaming Compacts. That same year, the Winnebago Tribe of Nebraska opened WinnaVegas Casino, the Omaha Tribe of Nebraska opened CasinOmaha and the Sac and Fox Tribe of the Mississippi in Iowa opened Meskwaki Bingo and Casino. The first of Iowa’s non-tribal casinos, Diamond Jo Casino, was opened in May 1994, with Catfish Bend following in June.[5]

The Iowa Lottery was established after lottery legislation passed in April 1985. The first ticket was sold in August. Since its inception, the Iowa Lottery has generated $1.3 billion for various state programs. The lottery’s three major benefactors are support for veterans, special projects out of the state’s General Fund, and Vision Iowa, a program that promotes Iowa tourism and helps build and maintain Iowa schools.

Maybe 2013 Will See Online Gambling Laws Revisited In Iowa

Like a few other states that are seriously considering the legalization of online gambling and have passed legislation through one committee or governing body but cannot get full support in the next steps of the legislative process, Iowa managed to push a bill through the Senate, only to watch it sputter to a halt in the lackadaisical House. Iowans are already participating in online gambling–as half of regular poker players surveyed at a land-based casino admitted to playing online at least several times a week–without the state seeing a dime of potential revenue. Just a few months ago, Iowa was thought to be in competition to be one of the first states to pass online poker legislation. But since the House failed to even vote on the proposal that passed by almost 60% in the Senate, Internet gambling regulations have fallen by the wayside in 2012.

When 2013 rolls around and Nevada is up and running with several online poker sites as is anticipated, you may see Iowa lawmakers get more serious about advancing online poker legislation. Until that time, Iowans will have to navigate through the Iowa cornfields to tribal casinos or riverboats to enjoy poker and other forms of gambling.

Citations, References and Further Reading

[1] Paulsen wise to fold on internet poker bill by the Iowa Republican publication
[2] Report on potential windfalls to be gained from regulated online gambling in Iowa – Uni.edu
[3] Iowa state poker bill may be dead – PokerNewsDaily report
[4] A history of gambling in the north west – gamblinggame4free.com
[5] The chronology of the Iowa racing and gaming commission – Iowa.gov
[6] The history of the Iowa State lottery – ialottery.com