Easier access to Iowa sports betting could create 'buzz'

DES MOINES — Sports betting in Iowa is expected to see another bump in wagering activity in 2021 when an in-person registration requirement is lifted Friday, according to industry watchers and regulators.

“I imagine that will increase and grow the pie,” said Sara Slane, a sports betting expert who operates an online advisory services firm and was gauging expectations as Iowa removes a barrier and eases access to sports betting.

Under the state law that commenced legal wagering in August 2019 on most professional and college sports, Iowa residents age 21 or older who wanted to place bets online first had to create an account by physically visiting one of the casinos licensed to conduct sports betting with proof of age and identity.

Each casino, in partnership with one or more sports betting companies, developed mobile applications or websites through which Iowans could place a bet if they didn’t want to go back to a casino each time.

However, that in-person requirement sunsets Friday, after which Iowans will be able to establish an online account over the internet.

Once an account is established, a bettor can place funds in the account at any time.

Brian Ohorilko, administrator of the state Racing and Gaming Commission, said currently eight sports betting companies have been licensed by the agency to develop apps for Iowa bettors, and he expects that number could grow to 20 — with several now in the licensing pipeline.

He said the uptick in sports wagering license requests is similar to the demand the commission saw before the 2019 football season when betting was legalized in Iowa.

“We’re starting to see casinos enter into agreements for the their second or third individually branded websites,” Ohorilko said in a recent interview. “So what we’ve seen is an increase in agreements between online sports companies and casinos.”

The Iowa law — made possible by a 2018 U.S. Supreme Court ruling that cleared the way for states beyond Nevada to provide bookmaking and betting at casinos and racetracks — legalizes betting not only on professional and college athletics, but also on daily fantasy sports sites such as DraftKings and FanDuel.

Iowa casinos will be able to have up to two individually branded websites per location, with the commission authorized to go to three if it chooses. That will allow gamblers to shop around and download different apps and compare sportsbook odds. The apps are set up, though, so they work only within Iowa’s borders.

Gambling industry experts say the interim requirement in Iowa law that sports bettors for the first 18 months had to travel to a state-licensed casino to establish an account in person contributed to a “subpar” first year and muffled participation, especially for Iowans who don’t live close to a casino.

However, they expect allowing Iowans to establish accounts online without that barrier will boost interest with the potential to grow wagering that stood at $314 million in the first five months of this fiscal year to potentially a billion-dollar annual enterprise in coming years.

“I think that’s within the realm of possibility. I don’t think you’re going out on a limb to suggest that,” said Max Bichsel, an executive with Gambling.com Group.

“It should create a buzz around Iowa for what’s able to be possible with sports betting,” Bichsel noted.

“There will be options for consumers,” he said, with competing companies offering promotions, bonuses and new products to entice a new crop of Iowa gamblers.

Legislative backers of Iowa’s approach have said they believe it was the right way to phase in the new gambling opportunity — temporarily requiring the in-person registration as a security precaution,

The state’s November gaming data report showed a second consecutive month of record sports wagering in Iowa as events and activities temporarily shuttered by the COVID-19 pandemic resumed. About two-thirds of the bets placed in fiscal 2021 were registered online as Iowans avoided public venues.

Bichsel said he expected that would grow to as much as 90 percent as Iowa’s market matures and participation expands.

“I think the average sports wagering customer may have more than one app. They may have two or three apps and they’ll be able to use those apps to shop around for the best odds or the type of bet that they’re most interested in,” said Ohorilko. “I think in these first few months, those customers are going to be marketed to very, very heavily and so I think there will be a lot of demand for customers, which means the promotions will likely ramp up here in this first and second quarter of 2021 as these online sports companies are trying to compete for their customers.”

Casino operators were delighted when legalized sports betting broke strong from the gates with revenue and attendance climbing in the first six months of fiscal 2020. But then it crumpled down the stretch when Gov. Kim Reynolds ordered gambling parlors and many other businesses closed last March to slow the spread of COVID-19.

The pandemic also forced the cancellation of major sports when college basketball and other betting attractions were in full swing, and Iowa’s casinos saw their net proceeds sliced by about 20 percent to post their lowest revenue totals since fiscal 2006 and attendance numbers the lowest since 1996.

The gradual return of pro and college sports enabled Iowa gamblers to wager nearly $87.2 million last month, setting another monthly record.

November’s sports bets generated $8.1 million in state revenue, bringing that year-to-date total to nearly $1.87 million. The state collects a 6.75 percent tax on the casinos’ sports-betting “hold,” which is the house’s share after bets have been settled. Casinos also pay annual fees; and the gambling is regulated by the commission that oversees dog and horse racing.

Overall for all wagering, though, Iowa’s casinos had a slightly down revenue month in November compared with October, with adjusted gross receipts of about $104 million and lower attendance figures at 1,157,533 as the pandemic dampened visits.

For the year, the 19 state-licensed casinos have posted $584.5 million in adjusted gross revenue, generating more than $111.9 million in state tax collections.