Lawmakers: Gambling phone “apps” not smart idea for Iowa

DES MOINES – Is gambling-heavy Iowa ready to venture into the next generation of online or “smart phone” gaming? With the bad taste of Touch-Play still relatively fresh, key legislators say don't bet on it.

Iowa Lottery chief Terry Rich put out some legislative feelers Tuesday, telling the Government Oversight Committee members that electronic delivery of lottery products is “coming fast” to surrounding states given the many technological “apps” at consumers' fingertips and several border states are looking at video lottery products similar to Iowa's ill-fated, slot-like Touch-Play experiment that ended in 2006 and required about $18.4 million to settle claims brought by the state's private partners.

Rich said he was not recommending or proposing any new gaming ventures, but he noted there are drawbacks to being “an offline state in an online world.” He joked that when he hears the words video gambling “I run,” but he advised legislators that said the advantage to having some involvement in new technologies is the state can legislate controls and regulations to bar players under age 21, prohibit gambling on credit, confine the activity to inside Iowa's borders, and guard against criminal or illegal activities.

However, lawmakers made it fairly clear they are not interested in expanding into electronic gambling at the current time – even though Rich said he has heard unverified estimates that illegal Internet gambling, sports betting and other prohibited wagering may be costing Iowa up to $1 billion a year.

The lottery leader said existing law authorizes him to research and evaluate new gaming options to maximize state revenues that currently approach $60 million annually and he is keeping a close eye on industry developments, but he assured the legislative panel he would not move ahead with any phone- or Internet-based gambling activities that are in full use in Canada and Europe without first getting the legislative go-ahead.

“My understanding is we could do that. Politically, it would be crazy,” Rich said.

Senate President Jack Kibbie, D-Emmetsburg, who tried unsuccessfully to push sports-betting legislation last session, said he thinks lawmakers are skittish about any further forays into electronic-based wagering for at least several years. Committee co-chairman Sen. Tom Courtney, D-Burlington, agreed but said that could change if lawmakers start to see state gaming revenues dive due to gambling options from sources outside the state's regulatory framework.

“I've yet to hear any sort of large voice saying we want to have online gambling or we want to have gambling on Smart Phones,” said Rep. Chris Hagenow, R-Windsor Heights, the other committee co-chairman. “I have not heard that message from Iowans yet. I don't think there's any groundswell of support for that and until we hear that, I think it's a dead issue frankly.”

Hagenow called new technology gambling options “a very large, new uncharted territory.”

Despite assurances from Rich that electronic gambling would be similar to electronic banking in terms of security and regulatory logistics, Courtney said he had concerns about controlling complaints associated with minors and problem gamblers and the proliferation of gambling beyond the current casinos venues and 2,500 retail businesses that offer lottery products.

“This would be worse (than Touch Play). This would be super, super bad,” said Courtney. “I don't think all this Internet and phone stuff is going to work for gambling. I think we've gone quite a ways with gambling in this state.”

Rich said lottery proceeds currently are running ahead of last fiscal year and sales projections. Through November, lottery proceeds were about 14 percent ahead of budget for the current fiscal year and sales were about 4 percent ahead of projections.