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Iowa Rule Requiring Sportsbooks to Maintain Prohibited Persons Lists Could Be Tossed

When Iowa lawmakers legalized retail and online sports betting in 2019, they included a regulation requiring sportsbooks to maintain lists of prohibited persons. Those lists are to include student and professional athletes, coaches, officials, and team personnel who are prohibited from betting on sports that they’re active in.

Iowa sports betting sportsbooks
The FanDuel Sportsbook is pictured at the Diamond Jo Casino in Dubuque. Iowa sportsbooks could soon be forced to maintain lists of people who are prohibited from betting on certain sports. (Image: USA Today Network)

Iowa’s sports betting statute prohibits “wagering by coaches, athletic trainers, officials, players, or other individuals who participate and persons employed in a position with direct involvement with coaches, athletic trainers, officials, players, or other individuals who participate in an authorized sports event in which wagers may be accepted.”

Most leagues and governing bodies, including the NFL, MLB, NBA, NHL, and NCAA, additionally prohibit those individuals from betting on sports in which they participate or are involved.

When legal sports betting began in Iowa in August 2019, the state delayed the list maintenance requirement until 2025. Now, state lawmakers in Des Moines are motioning to remove the regulation altogether.

Colossal Task

Iowa is home to 18 online sportsbooks and 19 retail casino sportsbooks. Lawmakers are working to remove the regulatory condition to require each sportsbook licensee to maintain a list of prohibited bettors ahead of the spring 2025 scheduled implementation.

The regulatory rule is presumably redundant, as the four professional sports leagues and the NCAA already have partnerships in place with third-party monitoring services to keep tabs on prohibited persons.

For example, the NCAA last month handed down a punishment against a former women’s basketball coach who was detected to have placed over 400 online sports bets, including 20 on college women’s hoops. A widespread scandal last year involving over two dozen student-athletes at Iowa State was also uncovered through regulatory services.

College and pro sports teams undergo perpetual change for an assortment of reasons not limited to trades, transfers, suspensions, and retirements.

Forcing sportsbooks to maintain up-to-date lists on every single professional and college sports team it takes action on is a herculean, if not impossible, task. That’s why Iowa Rep. Megan Jones (R-Sioux Rapids) is seeking to rescind the regulation.

There are 38 states that participate in sports gaming, but Iowa is the first to request or require this list,” Jones said. “Every now and again somebody gets in a tizzy and they’re kicked off the team.”

Jones’ House Joint Resolution 2004 would lift the list mandate slated for next year. The statute would “nullify administrative rules” related to the forthcoming regulation.

Bill Clears House

Jones’ sports betting resolution cleared the Iowa House of Representatives last week with a 92-1 vote. The legislation has moved to the upper chamber where it’s been allocated to the Senate Government Committee.

Iowa sportsbooks hope the resolution finds similar support in the Senate. Maintaining such lists would require much manpower and significantly increase each book’s overhead.

Iowa sportsbooks are fresh off a record year where bettors risked about $2.4 billion. Oddsmakers kept $199 million of the action on an 8.3% hold rate. DraftKings and FanDuel lead the state market.

Iowa’s sports betting industry faces new competition in Nebraska, where retail sportsbooks are opening. The Cornhusker State’s liberalization of sports betting is confined to in-person betting, but efforts are underway in Lincoln to expand sports betting online.

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