Iowa committee sends Internet poker bill to full Senate

3 March 2011
The Iowa State Government Committee voted 9-6 in favor of a measure that would legalize and regulate intrastate Internet poker on Wednesday. The bill now awaits action from the full Senate.
The bill's passage in committee came just one day before New Jersey Gov. Chris Christie issued a conditional veto on a bill that would have made New Jersey the first state in the United States to offer intrastate Internet gambling.
Supporters of the bill believe that it could generate $30 million a year in revenues for the state.
Several aspects of Senate Study Bill 1165 are notable:
  • Would give the Iowa Racing and Gaming Commission authority to license and regulate an Internet poker "hub" operator and its affiliates.
  • Language in the bill suggests that the state anticipates that there would only be one online poker network, but does leave the door open for multiple networks.
  • Proponents suggest 150,000 people in Iowa currenly play online poker for real money on sites that are not licensed and regulated at the state or federal level.
  • Affiliate licenses would only be granted to those currently running gambling operations in the state (e.g., gambling boats, racetracks, and casinos).
  • To get a license, both affiliates and the hub operator must have never accepted any online gambling wager (including poker) from an Iowa resident. This provision would eliminate operators such as PokerStars and Full Tilt Poker, who currently accept bets from players in Iowa, from consideration. It would even eliminate PartyPoker and other sites that left the U.S. market after the UIGEA passed in 2006 from consideration.
  • The hub operator would pay $3 million upfront, which would be credited against future taxes, which will be based on revenues.
  • The annual fee to renew the license would be $250,000.
  • Affiliates would also be charged $250,000 annually for their license.
  • Revenues would be taxed at the same rate as brick and mortar gambling revenues (five percent for the first $1 million, 10 percent on the next $2 million, and 20 percent thereafter).
  • Provides player protection mechanisms, requiring the hub operator to report any player complaints to the commission; also gives the commission authority to conduct independent investigations.
With New Jersey now out of the picture (at least for now), Iowa joins California and Florida in the race to be the first state to regulate intrastate online poker.

Aaron Todd

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Home-game hotshot Aaron Todd was an editor/writer at Casino City for nearly eight years, and is currently the Assistant Director of Athletics for Communications and Marketing at St. Lawrence University, his alma mater. While he is happy to play Texas Hold'em, he'd rather mix it up and play Omaha Hi/Lo, Razz, Deuce-to-Seven Triple Draw, and Badugi.