Legal Iowa Gambling Laws

Iowa state law treats gambling rather differently. There is heavy legislation governing exactly what one can and cannot do, yet a wide range of activities are permitted within these strict and somewhat convoluted criteria. Penalties are also levied according to the amount of money wagered in a game, an almost unique legal approach in the USA.

While most forms of gambling are regulated in some capacity, anything not specifically exempted under the law is deemed as illegal gambling and is punishable at the very least as a misdemeanor.

While Iowa was the first state to license riverboat gambling, the history of wagering in the state doesn’t contain any major US legends, although there is one amusing tale of a prop bet gone wrong concerning Des Moines, the sleepy state capital.

John Hennigan, poker professional, bet a number of his friends that he could survive in Des Moines for six weeks. This quiet state capital featured no casinos and Hennigan’s friends surely knew him well as he lasted all of two days before cracking and leaving town.

Considering he could have won a six figure sum just for sitting there for six weeks, this says something about Hennigan’s ability to keep himself amused without recourse to gambling, or at the very least it reveals how little he cares about money! With lifetime tournament winnings in excess of $3.2 million, six figures is… well, still significant actually.

Hennigan’s rather placid prop bet gone wrong has made gambling history, being recorded frequently in prop bet lists such as this one [1].

Despite its somewhat calm and quiet reputation, there are actually quite a lot of options for a state regulated flutter in Iowa, just be sure to attend licensed venues only as penalties for illegal gambling can be quite severe for the players as well as the organizers.

The Letter of the Law

While the law does make frequent reference to both games of chance and of skill, this doesn’t necessarily correlate to a distinction in legal status. Gambling which involves skill may well still be illegal unless it is a game specifically allowed or regulated by the state.

Section 725.1(1) states that a person shall not [2]“participate in a game for any sum of money or other property of any value” or “make any bet”, a quite clear indication that gambling outside of state regulated facilities is illegal.

Penalties for gambling activity range from a misdemeanour to various classes of felony, and it is possible to commit a felony purely by participating in an illegal game, depending upon factors such as prior convictions and amount wagered.
The strictness of state law can be observed by noting that a third offence for gambling where the money involved does not exceed $100 is a class D felony. A first conviction of gambling with money exceeding $5,000 is an instant class C felony.

Gambling equipment and winnings may be forfeit upon arrest, and while there is no specific statute concerning online gambling, it would seem that such activity would fall under more general laws on the subject.

Certain forms of social and charity gaming are allowed, provided they meet strict requirements, which usually include successfully applying for a license, and keeping all winnings by any one player over a period of 12 hours under a total of $50. This clause clearly drastically restricts what might otherwise be quite an effective social gaming policy.

An unlicensed social or company game may be run provided a “bona fide” social or employment-based context exists for the game, and that no house consideration is taken. This clause is quoted on the Gambling Law US site which features a comprehensive account of Iowa’s laws concerning gambling. It is not clear from this website whether the $50 cap applies or not. Best to either consult a lawyer, or assume the cap does apply.

Iowa's Laws on Legal Gambling Online

Iowa state does not have specific statutes ruling online gambling as illegal, however it is overwhelmingly likely that it would be deemed so under existing state law on gambling.

Section 725.1(1) states that a person shall not “for a fee, directly or indirectly, give or accept anything of value to be wagered … within or without the state of Iowa”, a ruling which could clearly be applied to online wagering.

However, the state has not been silent on this issue in recent years. A number of bills for regulating online gambling have been put forward, but so far all have “failed at adjournment”, usually suggesting that a state faces serious political opposition to the bill, or simply a lack of strong support to push it through to the Governor’s desk.

A recent proposal is Iowa Senate Study 1068, put forward for the 2013 legislative session. The bill proposes regulation for online poker but not for online casinos or other gambling, and contains a “bad actor” clause which would prohibit sites such as Pokerstars from running games in Iowa. The bill seems designed to allow existing land-based and riverboat casinos to run online poker.

The Iowa lottery has actually stated its active opposition to plans to legislate for intra-state online gambling, presenting another potential hurdle to any new legislation being passed.

A 2011 report from the Iowa Racing and Gaming Commission [3] suggested that the potential revenue from regulated intra-state gambling would not be so great, perhaps falling somewhere between $3 and $11 million per year. This estimate was based on an assumed active player pool of 150,000 Iowans, roughly 5% of the total population.
So while the prospects for Iowans of some form of state regulated online gambling (at least online poker) are not as slim as elsewhere in the US, there is no significant indication that the legislature is ready to pass a bill enabling this to take place any time too soon.

What Forms of Gambling Is Legal in Iowa?

There’s actually a really good spread of options in the state of Iowa.

The state has run a lottery [4] since 1985, and funds generated are used for “projects to create new recreation areas, support research at Iowa's public universities, benefit Iowa veterans, develop new products and techniques for agriculture, and promote tourism”.

Licensed horseracing with pari-mutuel wagering facilities takes place within Iowa, with the most popular place to go being Prairie Meadows [5] in Altoona. Simulcast wagering on national races is also allowed. Prairie Meadows are licensed to run their 2,000 slot machines and table games including a handful of weekly poker tournaments.

Is Social Gambling Legal?

The law surrounding social gambling is complex, and differs in relation to amount wagered, the venue at which the act occurs (whether liquor venue or private home), and the holding of licenses. In some cases licenses are not required for certain games at certain stakes, but only with other requirements in place. In other cases, even with a license for social gaming, one must be very careful of the type and stake of game being played, or risk violating one’s license and the law.
Certain games aren’t allowed at all socially, even when holding a license, including baccarat, blackjack, craps, roulette, dice games or slot machines. For details of the law as it pertains to liquor licensed venues, see this page from Iowa.gov [6].

A good rule of thumb on social gambling for Iowa are that if you wager or scoop a pot of over $50, you’re likely breaking the law. Even if you keep the stakes small, you may well need a license depending on other factors, and are best off consulting a lawyer before playing anything which takes place outside of a regulated venue.

State Regulated Casinos

The big gambling options in Iowa are the casinos, some of which are owned and run by local Native American tribes, others being located off tribal land, and in some cases on the water, in the form of riverboat casinos. There’s a decent selection out there, and although the casinos’ 2013 fiscal report saw another year of decline, the sizeable revenue of $1.444 billion is still a significant sum.

There’s a really quite pleasant guide to Iowa’s casinos to be found here [7]. Featuring a pinboard map and some short descriptions, this site lists 23 venues including three racetracks which are also allowed to run casino games. Dotted around the state with a slight concentration to the southeast, that’s enough to keep even a real gambling aficionado going for a while.

Horseshoe Casino Council Bluffs [8], which claims to offer the best odds of any casino in Iowa, as well as the highest stakes. With 1,900 slot machines, greyhound and simulcast racing, and plenty of table games including 18 poker tables, they cater for many gambling proclivities.

The poker room runs cash Omaha Hi/Lo up to $10-$20, and Texas Hold’em up to $2-$5. They run several hand bonuses as standard including $50 for hitting quads. The card room has also been known to host WSOP circuit stops.

The Diamond Jo Casino [9] in Northwood is a solid option, with seven poker tables and a decent mid stakes tournament schedule with games running five nights a week. This venue is reflective of the spread of casino options across the state, most run poker, but none at so high stakes or on as many tables as the Council Bluffs.

Recent Developments to Regulate Internet Gambling in Iowa

There are always petitions to open new casinos, with business and political negotiations going back and forth, such as this bid by the Winnebago tribe in 2012. The state is cautious to add to the list of regulated casinos, and progress on new bids is usually ponderous as participants navigate the narrow waterways of gambling legislation.

In a rare outpouring of cash money generosity from the casino industry, mogul Steve Wynn donated $25 million [11] to the University of Iowa in August 2013. The money is to be used in research for cures of rare eye diseases such as retinis pigmentosa, which Mr Wynn himself has suffered from.

Some blame his condition for a mishap Wynn famously had with a Picasso he was about to sell for $139 million, when he accidentally tore a dollar-sized hole in the canvas. After restoration he did manage to sell it for $155 million, however!
           

Busts and Arrests

Illegal gambling arrests do occur in Iowa, but the press is hardly littered with such stories.

In 2011 the police bust an Iowan bar for gambling on mice races. Somehow the story got as far as Reuters [12]. Despite the fact that the bar owners made no money on the $1 contests, they were cited by police for allowing criminal activity on licensed premises.

In a more serious bust two years earlier, police raided a home gambling ring, arresting 13 and charging three with felonies. Police seized over $10,000 in the raid. The homeowners could face up to 25 years in jail as a maximum charge, according to Sioux Land News [13].

In still more serious news, twenty-five were arrested in 2008 [14] for involvement in a ring which allegedly used illegal gambling revenue to fund a drugs business. The group is said to have operated nationally while being based in Iowa.

Summary

Your gambling options in Iowa are fairly varied, and include the state lottery, pari-mutuel horseracing, greyhound racing and simulcast, licensed charitable and social gaming, and land-based as well as riverboat casinos.

Just bear in mind that in breaking the gambling laws in Iowa you could face up to felony charges for simply gambling socially, depending upon the stakes and the context. If in doubt, seek legal advice or just don’t play outside of the casinos.

Sources for this article

  1. NYTimes.com: Pro Poker Players Bet Away From the Table, Too
  2. GamblingLawUS.com: Iowa
  3. UNI.edu: Iowa Report Doubts Intrastate Poker’s Revenue Potential
  4. IALottery.com: Official Web Site of the Iowa Lottery including Winning Numbers, Promotions and Games
  5. PrarieMeadows.com: Racetrack, Casino, Hotel, Events Center
  6. IowaDB.com: Social Gambling
  7. TheIowaCasinos.com
  8. HorseShoeCouncilBluffs.com
  9. DiamondJoWorth.com: Northern Iowa Casino. Poker, Table Games & More
  10. UIOWA.edu: Stephen A. Wynn gives $25 million to UI Institute for Vision Research
  11. Reuters.com: Iowa tavern cited for running mouse racing operation
  12. SiouxLandNews.com: New Details in Gambling Ring Bust
  13. MCall.com: Authorties Bust Drug, Gambling Ring