Reports out of Iowa this morning are confirming that a bill that would legalize and regulate online poker in the state has passed through a Senate subcommittee.
On Wednesday night, the Senate State Government Committee met to discuss the issue of online poker, both on the internet and through smartphones. There was a good deal of support for the measure and, perhaps surprisingly, no one appeared before the committee to speak out against the bill. With seemingly no objections, the legislation passed by an 11-4 vote, with three Republican senators and one Democrat voting no.
There are some strict guidelines set in the Iowa legislation, however. Potential online poker operators would have to partner with a state-licensed casino to be allowed to have access to citizens of the Hawkeye State. Players would have to be 21 years of age or older and be located inside the state to be able to participate, while tourists could come to an Iowa casino, establish an account and play while they are in the state.
Perhaps the most interesting portion of the Iowa bill is its handling of cross border issues. The legislation authorizes both intrastate gaming as well as interstate poker. The latter is most likely in an attempt to set up a multi-state online poker network, which would allow for the maximization of revenues with a larger player pool.
The advocates for the bill spoke about how the legislation will benefit Iowans. “I don’t see this as an expansion of gambling,” Senator Rick Bertrand (R-Sioux City) stated after the vote. “I see this as an expansion of freedom.” Another committee member, Senator Bill Dix (R-Shell Rock), pointed out how the law will look out for players, stating, “We have a situation in Iowa where citizens are not being protected. This (bill) will do that.”
The legislation does clear up many questions that the General Assembly had with the online poker question. The bill allows the state to bar offshore gaming sites from doing business in the state of Iowa while reaping the economic benefits of having Iowans play in-state. Senators also were pleased with the potential revenue that the legalization and regulation of online poker in Iowa would take from state fees to online poker operations and state licensed casinos.
A study by the Iowa Racing and Gaming Commission estimated that an intrastate online poker operation would earn between $13 and $60 million in revenues per year (Iowans are believed to wager approximately $100 million on online gaming at this time). Under current taxation rates in Iowa, the state would earn between $3 million and $13 million with an intrastate online poker operation, plus untold amounts from licensing of said operations.
The bill now moves to the full Senate, where Senate Majority Leader Mike Gronstal (D-Council Bluffs) believes that there is a 50-50 chance that the bill will pass. Although passage in the Senate is possible, the House would also have to consider the bill if it gets through the Iowa Senate. Senator Gronstal believes that the House, with a Republican majority, will have a much more difficult time in passing any potential online poker legislation.
If both branches of the Iowa General Assembly can come together and pass online poker legislation for the state, Iowa would become only the second state to legalize and regulate the industry. Nevada is currently moving forward with applications for licenses for its intrastate online poker operation and is believed to be looking at opening their operations by the end of this year, while the District of Columbia recently repealed a measure that was passed in 2010 that would have enabled an online gaming operation inside the district.