Sports betting in Iowa inevitable, experts say

ALTOONA — Were they betting people — and some sound like they are — experts wager sports gambling will be legal in many states, possibly including Iowa, in the near future.

The U.S. Supreme Court is considering a case that could open the door. Proposals to make sports wagering legal, pending that high court decision, have been introduced in 18 states including Iowa. Two states have passed the measures.

“Sports betting is coming. It’s going to be here,” said Will Green of the American Gaming Association. “It’s a matter of when, not if.”

Green’s organization has a vested interest in legal sports betting: The American Gaming Association lobbies on behalf of the gaming industry, including casinos that could host legalized sports wagering.

Green’s opinion was shared by other state and national experts who spoke this week at an event at Prairie Meadows Casino and Hotel in Altoona. The event, which featured a keynote address from a national professional sports expert and multiple panel discussions, was hosted by the Drake University Law School.

Legal sports betting may be on the way regardless of the high court ruling, some experts said.

“It’s coming, whether it’s state by state or whether it’s some congressional act. Because there’s a societal move toward it, as there has been toward marijuana, as a good example,” said keynote speaker Andrew Brandt, who in the past was an agent for professional athletes and member of the Green Bay Packers front office. Brandt is now a columnist for the Sports Illustrated website and director of Villanova Law School’s sports law center.

“And I think people realize the revenues, most importantly. We have a huge illegal market,” Brandt added.

Americans illegally wager $150 billion on U.S. sports annually. Of the $4.7 billion wagered on the 2017 Super Bowl, for example, 97 percent was illegal, according to estimates from the American Gaming Association.

More than 2 in 5 adults said they would place at least one bet per year in a legal environment, according to a survey of 1,000 people in five states: Iowa, Indiana, Oklahoma, Arizona and California, conducted by The Innovation Group, which conducts market research for the gaming industry.

Currently, betting on sports is legal in Nevada and three other states, with limited exceptions. The pending Supreme Court ruling — expected this spring or summer — could clear the way for other states to legalize it.

Advocates say Americans are illegally gambling anyway, so it would be better to legalize, regulate and tax the activity.

“People understand this is happening, and having a well-regulated market is the way to do it,” said Jake Highfill, R-Johnston, who is guiding a proposal through the Iowa Legislature.

As the event moderator noted, the same argument — people are doing it anyway — has been made regarding other forms of gambling and marijuana use, and those things remain illegal in Iowa.

Wes Ehrecke, president and CEO of the Iowa Gaming Association, said he thinks more education and a shift in attitudes make gambling possible in Iowa.

“A lot of education still has to take place for people to understand,” Ehrecke said. “We’re more optimistic on this because it was really a game-changer when the Supreme Court decided to hear the case.”

The proposed legislation in Iowa would place sports betting under the direction of the state’s casinos, and it would be regulated by the state’s Racing and Gaming Commission. Bettors could wager on professional and college athletics. Properties that wish to host sports betting would be required to pay a $25,000 license fee and a tax of 8 percent on sports betting revenue.

Legal sports betting would generate $80 million to $90 million in annual tax revenue for the state, according to The Innovation Group’s survey. While that is a significant amount of money, it would represent a relatively small drop in the state’s annual $7 billion-plus budget.

The proposed legislation also would legalize mobile sports betting. Highfill said without that provision to entice younger bettors, the proposal is “not worth it.”

Experts said sports gambling is not a huge money-maker for casinos. Slot machines and table games, for example, pay out over the long term at a mathematically consistent rate. But unexpected events and uncontrollable factors make sports gambling more volatile.

However, legal sports gambling likely would add foot traffic at Iowa casinos, attracting people who do not currently visit casinos.

Professional sports leagues in the past were vehemently opposed to the expansion of sports betting, but some leagues have evolved on the issue and are working with the gaming industry on proposed legislation in some states.

Two pro sports leagues have criticized the Iowa proposal for its lack of safeguards.

“We agree that time has come to give fans a safe and legal way to bet on sports. But any law authorizing betting must include rigorous protections to safeguard the integrity of our games,” Mike Bass, the NBA’s executive vice president of communications, said in a statement. “The bill rapidly advancing through the Iowa Legislature is deeply flawed and will not achieve that critical goal. It lacks the most basic requirements for strict regulation of sports betting.”

Major League Baseball issued a similar statement expressing its concerns.

“The legislation quickly advancing in Iowa would create incredibly weak and insufficient oversight of sports betting, and would not sufficiently mitigate the potential risks to our game that will emerge from legalized sports betting,” the MLB statement said. “The steps for strong regulation have been studied and proven to be effective for years in betting markets overseas, but this bill does not even come close to mandating the necessary precautions.”

The sports leagues have pushed for provisions allowing them to veto specific forms of wagering and a so-called integrity fee they say is needed to insure themselves against a potential betting scandal that could hurt the leagues.

Highfill called the integrity fee a “nonstarter” in Iowa and criticized the pro sports leagues, which make billions of dollars in revenue, for asking for more money in the gambling proposals.

Highfill said the Iowa proposal has more bipartisan support than any gambling bill he has worked on during his six years in the Legislature. On the official state list of registered lobbyists, the casinos support the bill and the NBA and MLB are joined by the Iowa Catholic Conference and Iowa Behavioral Health Association in opposition.