Counties would gain from new sports betting revenue formula

DES MOINES — All 99 Iowa counties — including, for the first time, the 15 counties that have state-licensed casinos — would receive funding from sports gambling revenue for quality-of-life improvements under legislation being considered by state lawmakers.

The proposal would distribute roughly $23 million that has accumulated in a state fund since sports betting in Iowa became legal and subject to a tax of about 7 percent. It would send the money — and future sports betting revenue — to all 99 counties for local endowments that fund quality-of-life improvements, such as emergency response services.

Counties that have casinos are Black Hawk, Clarke, Clayton, Clinton, Des Moines, Dubuque, Greene, Lyon, Palo Alto, Polk, Pottawattamie, Scott, Washington, Woodbury and Worth.

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As is the case under current law, the 84 counties that do not have a casino would continue to receive funding from 0.8 percent of the state revenue on all gambling in the state’s casinos. The proposed legislation would add a new funding stream from state revenue on gambling on sports and fantasy sports for all 99 counties’ endowment funds.

Under the proposed legislation, out of the state’s sports betting revenue, $1.8 million annually would go to the state’s gambling addiction treatment program and $1 million would go to the state’s general fund to expand the Endow Iowa Tax Credit — available for gifts to charitable causes — to a total of $7 million.

Of the revenue that remains after those appropriations, 85 percent would go to the County Endowment Fund, which goes to organizations that address needs in Iowa’s counties. That is the new revenue stream that would go to all 99 counties.

The Legislative Services Agency, the state’s nonpartisan fiscal analysis department, projects that new allocation would be $8 million in the state budget year that ends in June 2025.

“I am supportive of this as well I think it does a lot of good things,” Rep. Jacob Bossman, a Republican from Sioux City, said this week during a legislative hearing on the bill. “From gambling treatment to sports tourism to the Endow Iowa tax credit and the community foundations, I think we can put this money to good use.”

Iowa is projected to receive $12.5 million in tax revenue from sports betting in the current state budget year, which ends June 30, according to legislative agency.

The Sports Wagering Receipts Fund as of April 10 had accumulated a balance of $19.5 million, according to agency, after accounting for distributions to the gambling addiction program and to a sports tourism program.

Bossman said the proposed legislation came together because lawmakers in the past have had disagreements about where state tax revenue on sports betting should be allocated, but that this year lawmakers have grown closer to a consensus.

The proposed legislation, House File 710, has made its way through the legislative process in the Iowa House; it passed the full chamber Thursday with a unanimous, 99-0 vote. It is now eligible for consideration in the Iowa Senate.

“The one thing I really like about this (bill) is it distributes the money across all 99 counties,” Iowa Rep. Timi Brown-Powers, a Democrat from Waterloo, said Thursday as legislators debated the bill.

Latest sports betting numbers

Roughly $194 million in spots wagers were placed in Iowa in February, the month that included the Super Bowl, according to data from the Iowa Racing and Gaming Commission, the state agency that regulates gambling. That’s down from the $216 million that was wagered in February 2022.

That figured rebounded to $233 million in March, which included the NCAA men’s and women’s basketball tournaments. That figure is on par with gambling revenue in March 2022, which was $234 million.

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