The state of Iowa has long been one of the states included in the discussion of those that could possibly legalize and regulate online poker within its own borders. There was some activity on that front last spring, but nothing materialized. Now, with the recent Department of Justice (DoJ) reversal on the Wire Act, it appears that the ball may get rolling once again.
State Senator Jeff Danielson (D-Cedar Falls) told the Des Moines Register Tuesday that he has plans to introduce a new online poker bill to state legislature soon and expects it to be considered during the current session. A catalyst for the bill seems to be the DoJ’s December clarification of the Wire Act of 1961 in which it confirmed that the law only makes sports betting over the internet illegal, rather than all gambling. Even though the Fifth District Court ruled that it only applied to sports betting in 2002, the DoJ had always asserted that the Wire Act applied to gambling of all kinds. The DoJ’s clarification appears to have changed the attitudes of state legislators around the country, allowing new opinions to be formed about not just intrastate online poker, but interstate online poker, as well.
“We believe that because of the Department of Justice ruling, we can now have a multi-state compact,” Danielson told the Register. One major concern proponents of online poker have with regards to states legalizing the game within their own borders is that the player pool will be extremely fragmented and only a handful of states, such as California, would have a large enough poker playing population to adequately fill the virtual tables. If states collaborate on a multi-state player pool like we have seen in the lottery with games such as Powerball and Mega Millions, both the player pool and resulting revenue should be much more significant.
In December, the Iowa Racing and Gaming Commission published a study on the prospects of intrastate online poker in Iowa which estimated that it would bring in anywhere from $3 million to $13 million in tax revenue. State Senator William Dotzler (D – Waterloo), a supporter of the bill, would welcome the cash flow. “I think the evidence is pretty clear that Iowans are already gambling online. We are losing a lot of revenue [to offshore gambling sites] here in the state of Iowa,” he told the Register.
Interestingly, Danielson, who is also chairman of the Iowa Senate State Government Committee, was quoted in a New York Times article from Tuesday saying that he was not overly concerned with the financial impact of legalized online poker. “We are not doing this to expand our state budget,” he said. “Our purpose is to make sure every Iowan who wants to play poker has a fair game, has protections, and, if they win, is able to retain those earning [sic] in a fair and safe way.”
Danielson introduced an online poker bill early last year and it appeared that it had potential after passing through his Senate State Government Committee by a 9 to 6 vote. The bill stalled, though, once it reached the State Senate, when the usual concerns were brought up by the opposition. In the meantime, it was amended to request the aforementioned report from the Iowa Racing and Gaming Commission. “I just think people need a clearer picture of the evidence and I don’t think they’re ready in this session to legalize it. So we want to give them the best information possible as we go into next year,” Danielson said at the time.
