Senate votes to legalize fantasy sports

DES MOINES — Iowans could legally get into the fantasy sports game under a bill that landed in the winner's circle Thursday by a 32-16 vote of the Iowa Senate.

Senate File 166 would declare fantasy sports as games of skill different from gambling, ending Iowa's run among a handful of states where it is illegal for someone to collect more than $50 if the real professional athletes they've assembled as a virtual squad have the best combined statistics to win a fantasy contest or league.

'We are currently in legal limbo. We have never clearly defined what fantasy sports are in Iowa,' said Sen. Jeff Danielson, D-Cedar Falls, chairman of the Senate State Government Committee and the bill's floor manager. 'We hope to clarify that.'

However, opponents viewed the foray into fantasy sports as gambling that likely would morph into something bigger, like other forms of gambling that started on a limited basis in Iowa.

'I think we're going down a path here that could be very destructive to some people,' said Sen. David Johnson, R-Ocheyedan. 'When you have money and you have rewards, it's gambling.'

Opponents also raised concerns that promoting a virtual game dehumanizes the participants and creates a new set of losers who will export large sums of money to out-of-state operations without capturing those dollars in Iowa or producing an economic benefit.

Currently, fantasy sports games are considered illegal in Iowa.

According to the Iowa Attorney General's Office, Iowa law allows participants to gamble against each other when it's incidental to a 'bona fide social relationship' between the participants and no one wins or loses more than $50 over a 24-hour period. Also, it's illegal to engage in bookmaking, which means the wagers/bets must be made physically within the presence of each other.

However, Danielson said federal law that Iowa will mirror allows the activity, so Iowa 'is not plowing new ground' by opening Iowans to online opportunities where they can engage in contests offering prizes and money by acting as owners or managers in building a simulated team to compete against other fantasy owners based on the statistics generated by real professional athletes or teams.

Danielson said the proposal excludes high school sports and does not legalize sports booking in any way at the amateur or professional level.

Sen. Tony Bisignano, D-Des Moines, said he supported the bill but with some caution over not knowing who benefits from the billion-dollar industry and having in the Legislature when it passed low-stakes riverboat gambling as 'all fun and games' that developed into something much bigger.

'There is a lot of money involved in this. There are billions of dollars involved in fantasy sports in the United States,' he said.

'This started out as a friendly poker game in a bar with four buddies and now has become an international sensation,' Bisignano noted.

'I think it's a great thing because people have a great time with it. But I do think we'll visit it again,' he added. 'I think we have to be very cautious as we watch this develop and you have to, as they always say, follow the money in this because the state of Iowa right now has no way of catching any of this money except if one of us happens to win. But somebody's going to make tens of billions of dollars on this friendly little game that has caught on.'

A total of 22 Democrats and 10 Republicans voted for the measure, while three Democrats joined 13 GOP senators in opposing the measure.

Thursday's Senate passage marked the farthest in the legislative process that the issue has progressed, but House Speaker Kraig Paulsen, R-Hiawatha, said the prospects for S.F. 166 are murky in the GOP-led Iowa House.

'I have no idea. We haven't talked about,' Paulsen said. 'I don't think it's a done deal one way or another, so I think we'll have a conversation about it.'