Sitting between the Mississippi and Missouri Rivers, Iowa is a state that is situated in the Midwestern part of the USA. It is the 13th most populated US state, and what it is best known for are its rolling plains and endless cornfields.
Unlike most other states, Iowa boasts rather permissive gambling-related laws, which is yet another thing the territory is recognized for. In fact, the Hawkeye State, as Iowa is also known, now has a thriving gambling market because it is home to over 20 brick-and-mortar casinos. Yet, citizens of the state will not get to enjoy the same profusion when online casinos are concerned due to the fact that this form of gambling is off limits.
Sports betting is also a much-enjoyed pastime within the lines of the state, and its citizens can engage in such activities over the Internet and offline.
According to a survey conducted by the Oxford Economics and American Gaming Association back in 2013, the gambling market brought the state over $2.5 billion, while the total tax revenue stood at $726 billion. As it becomes evident from the figures, the gambling industry bears upon the economy of the state and adds value to it.
The legislation of the state leaves almost no room for interpretations in terms of the legality of the different forms of gambling as it is clearly-cut and unambiguous. Still, what is rather surprising about Iowa is that a great store is set by referendums on whether gambling activities should be continued in the individual counties or not.
Iowa Gambling Laws
Something essential that should be mentioned about the gambling-related legislation of the USA is that it continues to be highly restrictive even today. Since each state is entitled to regulate the different forms of gambling on its own, the legality of sports betting and playing casino games varies from one state to another.
New Jersey and Pennsylvania are among the states where gambling continues to thrive at an unseen pace. Iowa has also got a fair share of attention as its gaming market has started to gain momentum during the past few years.
Iowa and Online Casinos
In spite of the fact that most forms of gambling are made legal within the lines of the state, the same cannot be said about playing casino games over the Internet. The gambling market in Iowa poses as a growth-driver, which is the reason why the lack of a significant legislative push for the legalization of web-based casinos comes as a surprise.
Wagering on Sports in Iowa
As far as sports betting and wagering on fantasy sports in Iowa goes, punters are permitted to take part in such activities over the Internet and offline after Senate Bill 617 was approved. Under the provisions of the bill, “sports wagering as provided by this chapter is legal when conducted by a licensee” (Division I; Sports Wagering; Section 1).
Something essential that should be noted, however, is that gambling enthusiasts will only be entitled to wager on sports remotely, provided that they have already downloaded the app of the bookie they have settled on and have visited its premises in order to wrap up the registration process by proving their identity and age.
Interestingly enough, sports betting is still in its infancy in the state as this form of gambling was made legal back in 2019, which made Iowa the 11th state to give punters the go-ahead to lay their stakes on sports. The regulation of wagering on sports betting and fantasy sports was assigned to the Racing and Gaming Commission.
Iowa was the very first Midwestern state that signed off on wagering on sports, and Indiana and Illinois followed into its footsteps shortly after this.
Gambling enthusiasts will not be prevented from betting on sports through handheld devices too, provided that they are physically on the territory of Iowa. As is the case with other US states where online betting is not against the law, a geofencing will be employed so that any attempts to bet on sports outside Iowa will be staved off.
Iowa Taxes on Gambling
No matter whether gambling enthusiasts are residents of Iowa or not, they will be required to pay a tax on the winnings they have managed to amass.
On most occasions, the amount players will be prompted to pay will be withheld when the generated winnings are paid out. While betting on sports or playing casino games on the territory of Iowa, 5% of their winnings will be deducted for the income tax purposes of the state. The portion of the winnings that go for federal tax purposes stands at 24%. What is important to remember is that in some cases, filing an income tax return might also be required.
It is worth noting, however, that players will be exempted from withholding, provided that they have bet at American Indian Casinos. Still, players will be required to pay an income tax on their winnings.
Lottery winnings are subject to withholding, given that the amount the individual has won goes over $600. Players’ winnings will be subject to withholding also if they have taken part in raffles or have wagered on games of skill or chance, and the amount won is greater than $600.
As far as parimutuel betting goes, a withholding tax will be imposed on winnings that overstep the $1,000 limit. Finally, players will be required to pay a withholding tax on their winnings from slot machines, no matter whether it comes to racetracks or riverboats, on condition that they pass over the $1,200 threshold.
Gaming Regulatory Bodies in Iowa
Iowa’s Racing and Gaming Commission started functioning after the Pari-Mutuel Wagering Act was given the nod back in 1983, and currently, it is the only regulator that is tasked with the oversight of gambling-related activities within the state.
Under the provisions of the act, the Governor is responsible for appointing all the five members the Commission is made up of. Still, the appointment of the Commission members does not go without the approval of Iowa’s Senate. The term of the members cannot last longer than three years, and a maximum of three of its representatives can be from one and the same party.
The responsibilities the Commission is assigned are broad-ranging, and they include administration of both, the Excursion Boat Gambling Act and the Pari-Mutuel Wagering Acts. Therefore, betting on fantasy sports, sports betting, and commercial betting, among others, fall under the purview of the Commission.
Providing licenses to gambling operators and guaranteeing the protection of gambling enthusiasts are two more of the objectives of the Commission.
There is no denying that Iowa is one of the US states with the most gambling-friendly climates. Its residents are given an extensive range of brick-and-mortar casinos to take a pick from. Sports bettors are not prevented from taking part in their favorite pastime as well, and they are entitled to decide if they prefer to place their stakes over the Internet or offline.
Perhaps, the biggest issue for residents of the Hawkeye State is that playing casino games remotely is illegal. With this in mind, players seem to be ripe for the changes that need to be introduced to the state’s legislation in order to lift the ban. In spite of the fact that the most likely change might be the legalization of online casinos, the road ahead remains unclear at this point.