Senate votes to legalize, regulate online poker

Officials said regulating online poker would generate between $30 million and $60 million

DES MOINES — Backers of a bill to legalize online poker and bring it under state regulation were dealt a winning hand in the Iowa Senate on Tuesday, but they may still have to fold if Republicans who control the House choose not to deal with the issue this session.

Senators voted 29-20 to approve legislation authorizing the creation of an online poker network and providing a regulatory structure for its implementation, operation and taxation.

The bill would allow competing hub operators to partner with state-licensed casinos under the control of the state Racing and Gaming Commission. Online sites for registered players ages 21 and older in Iowa would be subject to the state’s current gaming fee structure.

“I think this is an issue whose time has come,” said Sen. Jeff Danielson, D-Waterloo, the bill floor manager who called it a consumer protection act. “If not now, it will not go away.”

Proponents of the legislation as well as state officials said regulating online poker, which currently operates in Iowa via illegal offshore wagering operations, would protect players and curb underage participation. Supporters also say the practice would generate adjusted gross receipts estimated between $30 million and $60 million for state-licensed casinos and between $2.9 million to $13.2 million in yearly tax revenue.

In the past, critics of the legislation have said that the legalization of online poker could be the first step down the path of wide-open Internet gambling. However, no one spoke in opposition to the bill during Tuesday’s floor debate.

A fiscal note prepared by the Legislative Services Agency indicated the state Department of Public Health projected the bill would contribute to an increase of 3 percent to 4 percent in the number of problem gambling treatment clients and a 5 percent increase in the cost of outside services. State regulators also projected the gaming expansion would require additional employees to oversee operations and additional special agents to conduct enforcement.

Eight GOP senators joined 21 Democrats in supporting the measure, while five Democrats and 15 Republicans opposed it.

The bill now moves to the House, where House Speaker Kraig Paulsen, R-Hiawatha, has said the issue faces dim prospects for passage.

“Nobody’s told me anything different,” Paulsen said Tuesday. “Nothing’s changed.”

Rep. Jeff Kaufmann, R-Wilton, said the issue had not been discussed by the majority House GOP caucus.“From my perspective, I think at this point in the year with the Senate burying a property tax bill and the Senate not moving on so many of our job-creation bills, I don’t see why in the world they would be spending time on online gaming when we have jobs that we need to create in this state,” he said. “I think it’s a waste of our time.”