n estimated 300,000 Iowans play fantasy sports, according to the Fantasy Sports Trade Association. But Iowa is one of only a handful of states where cash payouts are either illegal or subject to ambiguous laws.
Senate File 166 would legalize the process, which lets participants draft teams of real-world athletes to compete against other users by earning points based on actual games.
The legislation would bring the process under the purview of the Iowa Racing and Gaming Commission and would impose a 7.5 percent tax on revenue generated by the gaming companies after paying out prizes.
Advocates say they’re responding to Iowans who want to be able to legally play these games, which are available in many other states.
Representatives for other gambling facilities, though, said they would prefer to see the sites treated more like traditional casinos. Casinos pay a graduated rate on their revenue based on how much is brought in. They are also taxed when they provide free promotional play.
“We would prefer that this activity, this gaming activity is taxed the exact same way that we tax gambling at our facilities so there’s never a situation where you could price these differently (for consumers) because there’s a tax advantage of one form of gambling over another form of gambling,” said Jeff Boeyink, a lobbyist for SCE Partners LLC, the developer of the Hard Rock Hotel and Casino in Sioux City.
Others said they oppose the legislation on moral or ethical grounds.
Danny Carroll, who represents Christian conservative organization The Family Leader, asked whether the state really needs to make gambling more accessible by making it available online.
He said regulating fantasy sports betting “gives it an air of respectability” but said “it’s just one more parasite sucking the income out of hardworking Iowans.”
The Senate approved similar legislation last session, but it did not clear the House. This session, it has cleared the House Committee on State Government and was sent to the tax-writing Ways and Means Committee. A subcommittee approved the bill Tuesday and it next heads to a full committee.
On Monday, two of the largest fantasy sports websites — FanDuel and DraftKings — shut down operations in New York, where the state attorney general has claimed they are operating illegally.
According to a report from Reuters, the two companies are hoping the New York Legislature would legalize fantasy sports. If they do, the gambling claims against the companies would be dropped, though they could still faces charges for false advertising and other consumer protection issues.