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Gambling Bill to Study, not Legalize Online Gaming

Posted on May 1st, 2011

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After long hours of discussions and negotiations, the Iowa Senate has finally approved a gambling package this Wednesday with a 38-12 vote. It is now set to be debated in the House. Though its future in the House is now uncertain, the bill’s backers are confident that the package shall also receive support. The approved bill has undergone several changes since the beginning of the session. The bill was originally going to legalize Internet gambling in the state. Online gambling was supposed to be regulated through a hub operator which would provide links to state licensed casinos. The casinos would then run affiliated online gambling websites.

Instead the measure now calls for the Iowa Racing and Gaming Commission to release a study and report on Internet gambling. The report will be released at the legislative session beginning in January next year. The study will also include recommendations on how to regulate Internet poker, if it does get considered for legalization. The measure also requires the Iowa Department of Public Health to release a study on the social effects of online gambling. The report shall be released on October 1 of this year. Federal law only allows online gambling only if it is done within the state. A week before the approval of the gambling package, three online poker sites were closed down on allegations of illegal operations.

Online gambling still remains a very controversial topic in the state. Currently, around 70% of Iowa residents are against the legalization of Internet poker, while an estimated 150,000 Iowans participate in unregulated online gambling. Several amendments were made to the gambling bill. Senator Randy Feenstra, R-Hull has attempted to include an amendment to ban smoking in casinos. Yet this failed without a vote as it was ruled to be insignificant to the topic at hand which did not deal with health or smoking. The gambling package also changes the law which requires a countywide referendum vote on the existence of casinos. This was supposed to be occur every eight years. Now, the new amendment no longer requires casinos to pass referendums if they have already passed two. Citizens can still petition for a referendum if they are able to gain signatures of at least 10 percent of the voters.

The most heated debate happened after Senator Jerry Behn, R-Boone tried to amend this section of the bill. According to Behn, the 10 percent requirement was too difficult for citizens to achieve. He made Polk County an example since the county would require 21,000 signatures just for a referendum. Behn also stated that changing the rules would be unfair and they would be breaking their word as politicians by doing it. Other senators with Behn believed that the removal of the requirement also removes accountability and voters’ checks and balances. Yet the attempt was rejected, 16-34. The bill’s floor manager, Democrat Jeff Danielson argued that requiring the referendum would be too costly, stating that the costs were around $1 million to $4 million. He also added that casinos regularly pass the referendum with a 70% majority, indicating the voters’ strong support.

Senator Bill Dotzler, D-Waterloo also argued that the referendum has negative financial impacts on the casinos. Because of the referendum, they remain wary of investing in Iowa, out of the possibility that they may be closed down. The casinos have also experienced difficulties borrowing from banks because of this. Another measure of the bill includes the resolution of a long-running dispute between various Iowa horse breeders and Altoona over purse money. Also on the same day, the Senate also passed a bill that will give the state more control over mental health treatment. It was passed 27-23 and allows the state control over services funded by Medicaid. Eight mental health regions have also been created with the passing of the bill. Counties will also continue to pay for non-Medicaid expenses. Senators also approved budget bills which covered administrative and regulatory functions as well as the judicial branch. The bills also include 50 percent funding for fiscal 2013. The bill was largely an effort for the Democrats meet Governor Terry Branstad’s request for a two year budget. However, Branstad remained unsatisfied, saying that it has not resolved the stalemate on his intent to adopt the two year budget for the state’s government.