Surpassed expectations in 2021

Iowa lawmakers discuss how to expend extra sports betting income amid market momentum

FanDuel Sportsbook at Diamond Jo Casino Dubuque, in Iowa.
United States
Reading time 1:59 min

Iowa’s sports betting momentum is exceeding state expectations: in 2021, the market topped $2 billion, proving Iowans have an interest in betting on their favorite sporting events. But now, as tax revenues reported to state increase, lawmakers face a key question: what to do with the extra income and how to spend it.

“The money coming in is maybe a little more than expected,” House Speaker Pat Grassley, R-New Hartford, recently said, according to The Gazette. Grassley thus suggested starting a conversation on spending the $13 million generated by sports betting in the state since approval, nearly three years ago, in 2019.

Iowa currently taxes operations at 6.75% and, in 2021, the state posted a record $2 billion in wagers, considerably up from the $575 million in handle posted in 2020. Key in enabling this growth was a decision to now allow bettors to set up accounts through mobile devices or computers, instead of having to go into a casino to open a sports betting account.

The state saw twice as many operators enter the market in 2021 and, in November, the momentum in sports betting led Iowans to bet a record-setting $9.6 million per day. A landmark year for the market, 2021 saw Iowa placing within the top 10 legal sports betting jurisdictions.

“We're looking at doing some things with it that benefit Iowans,” Grassley said of sports income kept by the state. “So we're going to engage in those conversations.” 

Suggestions on what to do have started popping up. House State Government Chairman Bobby Kaufmann said he would like to direct the revenue to the counties that do not host one of Iowa’s 19 licensed casinos, adds Waterloo-Cedar Falls Courier.

Kaufmann is currently drafting legislation to direct revenue to non-casino counties. The money would help support first-responder services, in particular fire and ambulance, as well as other community improvements, including youth sports facilities. He expects bipartisan support for the bill.

A second proposal by Democrat Rep. Mascher or Iowa City seeks to spend the wagering revenue on mental health: her plans would appropriate money from the Sports Wagering Receipts Fund to support the state Department of Public Health’s Gambling Treatment Program.

Mascher’s proposal comes amid concerns that gambling addiction might rise as a result of sports betting’s increased popularity. The Democrat Rep. expressed preoccupation in Iowa not having enough counselors and social workers “to address problems” which have a direct relationship with gambling.

The discussion on what to do with revenue becomes more pressing as Iowa sports betting shows no sign of slowing down. Last year saw record-setting figures, but the state could soon shatter the numbers as its market hasn’t reached maturity yet.

“Sportsbooks continue to expand their reach to new customers as potential bettors become more comfortable with the idea of legal sports betting,” stated Russ Mitchell, lead analyst for earlier this month. And as Iowa bettors become more familiar with diverse forms of betting such as in-game wagering, the market should continue to grow.”

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