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Iowa Online Lottery Proponents Renew Push For Legalization

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Matt Strawn, who took over the seat of retiring Iowa Lottery CEO Terry Rich, has been working to advance the position of the online lottery in his state since Gov. Kim Reynolds elevated him to the position in January.

Last week, Strawn addressed the House Oversight Committee to make his case for the Iowa Lottery to enter into the modern age with an e-commerce option for players. Strawn contends that the “time has come” for the state lottery to modernize its offerings and provide options for participation beyond the cash-only status-quo.

Iowa Lottery discussion

Sales posted for the lottery in 2018 topped record numbers, and 2019 is already ahead of projections, according to Strawn. However, concerns are that sales will slow and proceeds allotted to the state treasury will face negative effects. Strawn says that the lottery making the suggested upgrades to policy and infrastructure could avoid the issue entirely.

Citing 10 other US lotteries already offering online products to players in-state, Strawn argued for the updates, “Without the ability to modernize our products, we anticipate that lottery proceeds will only be able to continue at their current levels for a few more years, and then we anticipate a downturn, due to the decreased use of cash and the overall trend toward e-commerce.”

Committee members acknowledged the need for change but cautioned that a measured approach was more important in the eyes of representatives. Chairwoman Mary Ann Hanusa, R-Council Bluffs, offered the opportunity to discuss changes to state lottery legislation following the current review of legalizing sports betting in Iowa. In response to Strawn, she said, “We want to do it thoughtfully. We don’t want to rush into anything.”

Iowa sports betting legislation

Earlier this month, an Iowa House panel voted on HF 648. The legislation in favor of legalized wagering on professional and collegiate athletics, as well as fantasy sports, passed with a vote of 16-9. The bill will now proceed to a full House vote for further consideration.

The bill passed by committee vote after the House Ways and Means Committee amended the language to expressly prohibit in-game prop betting on matches and events that involve individual athletes from Iowa colleges and their opponents. In this case, such a prop betting prohibition does not apply to athletic events that involve colleges based outside of Iowa. Even with this provision, opponents of the sports betting legislation are committed to removing all college athletics from gambling facilities. Proponents argue that these sports betting practices and many others already take place illegally in the state of Iowa, the outlawing of which would only serve to benefit bookies and offshore bookmakers who are not subject to the regulations and tax laws of Iowa.

In addition to the above-stated prohibition, committee members also proposed an increased state tax rate on specific app wagering. This wagering pertains to Iowans who are 21 and older who have registered at state-licensed casinos. The committee also wants a greater portion of revenue derived from sports betting to go toward nonprofit organizations and problem gambling treatment programs in those communities that house state-licensed casinos.

Josh Lehman, the communications director for the state Board of Regents, issued a statement following the vote in favor of the prop bet ban, saying that, “Maintaining the integrity of our student-athletes is of paramount importance to the board. This amendment is a positive step in that direction.”  Lehman and the Board of Regents currently oversee operations of state universities in Ames, Cedar Falls and Iowa City.

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