PROTECT IOWA SPORTS FANS FROM A TRIPLE TAX
Iowa’s legal sports betting system is working. It’s fair, safe, and bringing in millions in tax revenue for the state. So why change it? A tax hike isn’t necessary, and it would make things worse for everyone.
The bottom line: Tripling the tax rate would hurt Iowa sports fans and drive people back to the illegal market.
When legal betting becomes less attractive, more people turn back to the illegal market, where there are no protections, no age verifications to protect minors, and the state collects nothing.
Iowans don’t want tax increases. And raising the tax rate will cost consumers AND cut off a growing source of state revenue.
While legal sports betting drives down the illegal market, tripling the tax rate would threaten to jeopardize all of Iowa’s progress, pushing consumers back to illegal sites that neither pay taxes nor protect players and kids.
The Economics of Legal Sports Betting
More than 90% of bets placed with legal sportsbooks get repaid to customers in winnings, while the vast majority of the remaining dollars go toward building out technology, creating responsible gaming tools, and local partnerships and marketing. Customers in states that have raised sports betting taxes end up paying due to a more costly sports betting experience, from worse promotions to decreased payouts.
Iowa’s Current Sports Betting Market is a Win for All
Customers, sports fans, local businesses, and the state all benefit from the current sports betting market. Due to Iowa’s competitive tax rate and market structure, consumers can access a wide range of sportsbooks and wagering options.
Any increase to the previously negotiated sports betting tax rate threatens the existing relationships between local businesses and the sports betting operators to whom they provide market access. This arrangement keeps money in Iowa and helps secure thousands of industry jobs.
Iowa’s current sports betting tax is fair and makes millions of dollars available to state policy makers to fund key state priorities.
Illegal sports betting hurts consumers
Legal and regulated online sports betting offers a safe alternative to the illicit offshore marketplace, which continues to flourish in states that haven’t yet legalized online sports betting.
Experts estimate customers spend tens of billions on the illegal sports betting market each year, depriving state and local governments of significant tax revenue. These illegal and unregulated offshore sports betting websites are unsafe products – offering no consumer protections, age verification or responsible gaming protections. Illicit market users also routinely fall victim to scams and find themselves unable to remove funds from their accounts.