Iowa sports betting: ‘Fields of Opportunities’?

DUBUQUE, Iowa—If a citizen of the Midwest is interested in state-sanctioned wagering on sports, they’re out of luck—unless they come to Iowa.

The state slogan, unveiled by former Gov. Tom Vilsack in 1999, is “Iowa: Fields of Opportunities.” That replaced the profound “Iowa: you make me smile.” It’s no longer actively used by state agencies, but the branded signs still linger near borders.

More than 7,500 Iowans voted to determine the marketing pitch via the Internet, newspaper ballots and fax machine.

“When we think of Iowa we think of fields, certainly because agriculture is a major part of the state economy,” Vilsack said at an Iowa State Fair press conference, according to the Associated Press. “But fields also refer to professional fields.”

Iowa has long evoked fields and farming in national culture. Iowa’s pinnacle contribution to the film industry is the 1989 fantasy drama, “Field of Dreams,” filmed in Dyersville. Ray Kinsella, played by Pete Buttegieg celebrity surrogate Kevin Costner, sees visions of a baseball diamond and hears a persistent whisper amid his cornfield: “If you build it, he will come.”

When Iowa lawmakers overwhelmingly voted to bring sports betting to the state last spring, they heard a different sound—something along the lines of ka-ching! As in cash. Lots of it.

Last year, following a U.S. Supreme Court ruling legalizing sports betting in 2018, Iowa’s legislature swiftly passed a bill to implement the practice in the state’s 19 casinos regulated by the Iowa Racing and Gaming Commission (IRGC). Backers of the bill—from lawmakers, to gaming industry officials to local economic development agencies—touted the potential financial benefits to the state from tourism, a key driver of the entertainment industry.

“The Iowa legislature is to be applauded for their very thorough and deliberative approach last session to adopt what is considered the model legislation in the country” said Wes Ehrecke, president & CEO of the Iowa Gaming Association. “It is evident that many people enjoy watching and wagering on sports in a well-regulated, high integrity and fun environment.”

Post-prohibition sports betting handle now tops $212 million

Editor’s Note: Casino Queen Marquette has not yet accepted sports wagers. The IRGC authorized sports wagering operations on Aug. 15, 2019, but some sports wagering operations launched later.

Since prohibition ended in mid-August, Iowa’s IRGC-regulated casinos (Iowa’s four tribal casinos, operating under a different regulatory structure, do not offer sports betting) reported a $212.2 million handle—or amount bet—as of Jan. 9. They paid out $192.9 million to winners. Casinos captured $19.3 million in net receipts and transferred more than $1.3 million in taxes to the state, according to IRGC’s fiscal year 2020 revenue report [see figure above].

The handle for the second half of August was $8.6 million. That grew to $28.5 million in September and $46.5 million in October, according to statistics analyzing IRGC data maintained by Legal Sports Betting.

A staggering $75 million has been bet on sports at Altoona-based Prairie Meadows since the William Hill Sports Book venue opened in August. That handle is more than four times next biggest player, Waterloo-based Isle Casino Hotel Casino, which accepted $18.7 million in bets during the same period.

Gary Palmer, Prairie Meadows’ president and CEO, attributed the success of sports betting at the Capital-area casino to its location in Iowa’s most populous urban area, significant investment in remodeling the fourth floor of the casino dedicated to sports betting.

“We’re fortunate that we have horseracing because we have a clubhouse,” Palmer said in an interview. “It’s perfect for sports betting. It’s another amenity that we’re glad to offer. People enjoy it, and it’s been good for us.”

The casino has registered more than 18,000 bettors to gamble on games. Casino leaders planned for the rollout for more than two years after 2018 the Supreme Court decision. Since then, bettors nationwide have legally gambled nearly $16 billion on sports.

Iowa’s handle has grown exponentially, as operators progressively launch apps and renovate properties to add sports betting sections. Casinos are spending millions to market the newly-available option to Iowans and potential Hawkeye State tourists.

Many of those bets have been placed by citizens of neighboring states, none of which have yet legalized and implemented sports betting. Illinois has legalized the practice, but it’s not yet operational. Missouri and Nebraska lawmakers are weighing legalization.

Players must set foot in Iowa to legally bet on sports via a casino-directed app. Until 2021, a person needs to physically visit a casino to register to bet. Thereafter, customers can choose to visit the venue or bet on games from their couch.

Analysts say Iowa could overtake Nevada and New Jersey to become the sports betting capital of the U.S.

None of Iowa’s sports books are lowballing their investments. As SportsNaut’s Vincent Frank notes, $300 million or more in annual revenue is potentially up for grabs. That would translate into about $20 million in tax revenue for the state—plus more for local governments.

“It is possible that Iowa can overtake both [Nevada and New Jersey] and be the sports betting capital of the United States,” according to Legal Sports Betting writer Daniel Borjas.

With 19 casinos and the ability to bet from anywhere via app, Iowa could see billions of dollars bet on ball games over the next few years.

“Once the Iowa market reaches maturity, its potential is on par with what Nevada is today,” Dustin Gouker, lead analyst for PlayIA.com, told SportsNaut. “That means a handle that will exceed $4 billion a year, and perhaps approach $5 billion. And as we have seen with the success of the early adopters of legal sports betting, such as New Jersey, the state should reap millions in tax revenue.”

Americans—and Iowans—love betting on sports, and plenty of people broke the law to do it before last summer.

More than six percent of adult Iowans admitted to betting on sports within the last year (half that copped to betting within the last 30 days), according to a 2018 survey by the Center for Social and Behavioral Research at the University of Northern Iowa. Nineteen percent—nearly 1 in 5 adults—bet in office pools or other sports betting environments. Five percent participated in fantasy sports.

Sports betting is pretty much a guy thing—82 percent of sports bettors are men, according to the study. Nearly half—49 percent—are between 18 to 34-years-old. More than half hold at least a college degree and a household income of at least $75,000, more than the Iowa median of roughly $58,700.

Sportsbooks model ambiance on Las Vegas, the U.S. gaming mecca

In Las Vegas circa 1975, Jackie Gaughan saw dollars both in the sky and on America’s athletic fields of battle. Nevada’s crippling 10 percent tax on sportsbooks was history. The game was wide open. It was showtime.

With a casino man’s confident grin, Gaughan opened the doors to his new gaming establishment at Union Plaza. With legendary oddsmaker Bob Martin at the helm, the United States’ first sportsbook began taking bets.

But Gaughan could see the competition coming fast and furious from less than a mile away.

Less than a year later, notorious and ingenious Frank “Lefty” Rosenthal (the model for filmmaker Martin Scorsese’s 1995 film “Casino”) constructed the prototype for the modern race and sportsbook. Setting up shop at the Stardust, Lefty’s luxurious book featured revolutionary bells and whistles for the non-digital times: six giant screen televisions and seating for 300.

Professional sports gaming in America entered a new galaxy of comfort, technology and customer reach. And the field reached a higher level of technical sophistication a few years later when Vic Salerno went all in on his sports gaming hobby. The self-described “bored dentist” developed a high-tech, Wall Street-style computerized bookmaking system. CBS Computer Systems delivered sportsbook hardware and software that enabled bookmakers to speed up betting and transactions to a supersonic pace.

Lefty’s brazen role of the dice on sports betting has molded Las Vegas—and international—sportsbooks ever since. Salerno’s blueprint is the way wagers are placed and processed today. As new sportsbooks roll out across the nation with mass legalization of sports wagering, the Las Vegas model is still the prototype. But each state is giving its industry their own local flair, ambiance and branding.

Iowa Vegas

In Iowa, Las Vegas is here with a distinctive homestyle charm. It’s Iowa Nice meets SportsCenter held at your local bar with data analytics that would put some Fortune 500 companies to shame. Casinos statewide are putting their own stamps on sportsbooks while going all out to make guests feel like they are gaming on the Vegas strip.

The goal: Make the sports wagering experience as close to Sin City as possible. Westgate Las Vegas Superbook (“there isn’t a more electric atmosphere in the city,” Action Network raves about the largest sportsbook in Nevada), Wynn Las Vegas and Caesars Palace are among the top supermodels Iowa sports parlors are designing their look, feel and amenities to emulate.

“People are familiar with what sports wagering looks like in Nevada,” IRGC executive director Brian Ohorilko said in an interview. “It was important for the casinos to try to simulate that environment, but do it in a way that made sense for our market and the size and scope of our market.”

Brian Ohorilko, executive director of the Iowa Racing and Gaming Commission / CONTRIBUTED

Legal Sports Report publishes and maintains a comprehensive guide of sports betting in Iowa and other states. The information service, a lead generator for Malta-based Catena Media group, has actively covered Iowa’s market. A story last month featured the launch of Gaming Innovation Group‘s (GIG) sportsbook at the Hard Rock Sioux City Hotel & Casino, bringing the number of online sports book operators in Iowa to five.

GIG’s mobile app follows William Hill, which has partnerships with four casinos; Elite’s Casino Resorts‘ Bet.Works platform operating in the company’s Davenport, Riverside and Larchwood properties; Q Casino‘s in-house branded app on the IGT platform; and PointsBet, the vendor for Burlington-based Catfish Bend Casino.

Hard Rock ranked ninth of of the state’s 18 casinos taking bets last year (the Casino Queen Marquette is the only holdout so far), but GIG’s mobile app should help the Hard Rock move up the ranks as the Sioux City market has untapped potential.

Los Angeles-based Peninsula Pacific Entertainment (P2E), which owns 50 percent of the Hard Rock Sioux City, announced an agreement last month with Warner Gaming to buy out the company’s ownership stake in the property. The firms expect the deal to be finalized in the second quarter of 2020 (pending regulatory approval—including by the IRGC).

P2E also operates del Lago Resort & Casino in Waterloo, N.Y., DiamondJacks Hotel and Casino in Bossier City, La., Colonial Downs Racetrack in New Kent, Va., and Rosie’s Gaming Emporium locations in Chesapeake, Va., Hampton, Va. and Vinton, Va. In partnership with a group of Cedar Rapids investors, P2E has applied for a license to operate a Cedar Rapids casino with the IRGC. In both 2014 and 2017 regulators determined that Iowa’s gaming market was too saturated to permit additional casinos.

“We have a long history with Hard Rock, and in Iowa communities, and we are excited to continue to grow our community engagement and investment in Sioux City,” M. Brent Stevens, P2E’s chairman and managing partner, said in a company press release. “Providing outstanding service and quality is a never-ending priority at each of our Peninsula Pacific Entertainment properties, including Hard Rock,” said Stevens. “This is a step in our direction to continue improving the Siouxland with an exceptional place to work, a memorable place to stay or play, and a way for us to contribute to the region’s economy.”

Iowa will never be confused with the Las Vegas Strip, especially during a cruel Midwestern winter. But today, Iowans need only to venture out to their local book to feel like they’re wagering in the gambling capital of the world.

Beyond the Super Bowl, March Madness and the upcoming Major League Baseball season, one of the biggests sports betting draws in Iowa this year is certain to be the Aug. 13 showdown between the Chicago White Sox and the New York Yankees at the Field of Dreams site in Dyersville—the first MLB game ever played in Iowa. That will be almost exactly a year since sports betting launched in Iowa.

Adjacent to the existing field, the operator of the complex is building an 8,000 seat stadium with the original dimensions of Comiskey Park. The MLB has not yet announced how tickets will be distributed, but it’s a safe bet that the game will be featured at every Iowa casino’s sports betting parlor.

Fittingly, the plot of the movie revolves around the infamous Black Sox scandal. Authorities accused eight White Sox players of intentionally losing the 1919 World Series in exchange for bribes from an Arnold Rothstein-led gambling syndicate. Even after the acquittal of all players—including ‘Shoeless’ Joe Jackson‘—at a 1921 trial, the newly-appointed MLB commissioner banned the men for life from pro baseball and barred their entry into the Hall of Fame.

In the film, Jackson’s ghost appears to Kinsella and asks if the Black Sox can play on the hastily-constructed field. As the film ends, hundreds of cars are shown in a traffic jam on the highway headed to the field. As thousands of baseball fans prepare to flock to Eastern Iowa this summer, one thing’s a sure bet: millions of dollars will be wagered on that game. After years of planning, Iowa casinos will be primed to reap the windfall of sports betting at its pinnacle.

Editor’s Note: Iowa Scientist is compiling a comprehensive guide to sports betting in Iowa, which will be released in early February. To submit tips, content or comments, please visit our submissions page or email info [at] iowascientist.com.

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