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State of the Union: US Sports Betting Update – Iowa Joins The Sports Betting Party

Iowa has become the 11th U.S. state to legalize sports betting when Gov. Kim Reynolds signed S 617 into law this week. It permits the state’s 19 casinos to launch land-based sportsbooks and roll out online sports wagering for anyone with Iowa’s borders. It sees the Hawkeye State follow in the footsteps of Montana and Indiana by becoming the third state to legalize sports betting in 2019. Sportsbooks are tipped to launch across Iowa in time for the start of the new NFL season, which begins when the Chicago Bears host the Green Bay Packers on September 5, 2019.

Last year Delaware, New Jersey, Mississippi, West Virginia, Pennsylvania, Rhode Island and New Mexico all joined Nevada in offering legal sports betting after the Supreme Court axed PASPA. Lawmakers in many more states are keen to join the party and S 617 passed through the Iowa House by a vote of 67-31 earlier this month. The Senate wanted to impose a $15,000 initial licensing fee, whereas the House asked for $75,000, so they met in the middle at $45,000. There will also be a $10,000 annual renewal fee. This pales in comparison to the up-front $10 million fee that Pennsylvania charges any operator that launches sports betting.

Iowa will also take a 7.5% tax on sports betting revenue. Again, this is minor in comparison to the 36% cut that Pennsylvania takes, and it should not prove a barrier to entry for the majority of Iowa’s 19 casinos. There were 16 separate hearings before the bill reached Reynolds’ desk, and one amendment saw operators banned from accepting prop bets on college sports. A decision still needs to be made about whether sports fans can bet on credit. Reynolds had until May 27 to sign the bill into law and she beat the deadline this week.

FanDuel and DraftKings Set to Launch

The onus will now be on Iowa’s casino operators to build out brick and mortar sportsbooks and tie up deals with leading online operators to launch apps on their licences. New Jersey has been by far and away the most successful new market for sports betting since the federal ban was ended last year. FanDuel and DraftKings are the clear market leaders in the Garden State, and they both have the opportunity to launch in Iowa thanks to existing partnerships. William Hill, which is present in every U.S. state with legal sports wagering, has already secured a partnership with Prairie Meadows Racetrack & Casino to operate an 8,600 sq. ft. sportsbook in Iowa.

PointsBet, another operator that is offering legal sports wagering in New Jersey, secured a deal with Catfish Bend Casino in Burlington to offer Iowans a regulated sportsbook before Reynolds even signed the deal. “The potential legalization of sports betting in Iowa opens an exciting new opportunity for recreational and avid players, and PointsBet’s unmatched dedication to bettors makes them the ideal partner for our brand and go-to-market plan,” said Gary Hoyer, chief executive at Catfish Bend owner Great River Entertainment, at the time.

Tennessee Seeks Tourism Boost

Tennessee is expected to become the 12th state to offer legal sports wagering in the near future. The land of country music, whiskey and southern hospitality expect to receive an extra 3.5 million tourists as a result of legalizing sports betting. That would see sportsbooks eclipse Graceland, the iconic former home of Elvis Presley, and the Jack Daniel’s distillery in terms of drawing tourists into the state. Legislators in neighbouring Kentucky failed to introduce sports wagering this year, and that should play into Tennessee’s hands as it bids to attract visitors.

Gov. Bill Lee is not a fan of sports betting, but he should allow bill H1 to become law without his signature in the coming days. H1 only covers online betting, but Tennessee lawmakers still believe this will be enough to attract the tourists. Licenses will cost $75,000 per year and there will be a 20% revenue tax, and that could lead to very few operators applying to launch sportsbooks, leading to a dearth of competition. Tennessee legislators also caved into intense lobbying from the professional sports leagues to force anyone operating in the state to buy official league data to settle in-play bets, which is expected to cost them a further 1% to 2% of their revenue. It is the only mandate of its kind in the country. Operators would need to spend money on acquiring customers in an online-only market, further eating into their profits, and many could simply decide not to bother with the Volunteer State.

New Hampshire is also hurtling towards a legal sports betting industry after the state’s Special Finance Committee approved H 480 this week. The bill began life in the House and it has since received some amendments, so if it passes through the Senate it will need to go back to the House for rubber-stamping, before being sent to the governor’s desk. Sports betting bills in neighbouring Massachusetts are up for House hearings this month, while Rhode Island is also gearing up to add online wagering to the land-based sports betting it already permits.

Take Me Home, Online Sports Betting

West Virginia is another state that has seen limited revenue from sports betting due to a lack of online operators. BetLucky was the only site operating in the state, but it was taken down in March 2019 amid a contract dispute with white-label provider Entergaming. Now West Virginia is getting back in business as DraftKings is ready to launch its popular app on the licence of Penn National Gaming’s Hollywood Casino at Charles Town.

The online sportsbook completed a testing phase this week and it is set to go live imminently. “We were making sure we can get the reports out of it that we need,” said West Virginia Lottery director John Myers. “Making sure that we can verify the player that has the account is the one playing and to make sure the geolocation system works and those people are actually located inside the state of West Virginia.” It has all gone according to plan, and now FanDuel and William Hill are expected to follow suit by launching online offerings within the state.

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