Iowa Approves Betting on Esports Contests, DraftKings’ Wish Granted

The Iowa Racing and Gaming Commission (IRGC) voted unanimously for the approval of betting on esports in the state, but only through contests. The regulator granted the request from DraftKings to allow state residents to participate in the daily fantasy esports competitions via its website.

IRGC Approved Esports Contests

During the meeting at Grand Falls Casino and Resort in Larchwood, commissioners voted 5-0 to approve esports contests but since no one made a motion on the request from the Iowa Gaming Association (IGA), the regulator did not take a vote on it, leaving esports out of the sports books’ offering of the 19 land-based casinos the association represents.

The commissioners stood behind the opinion of the legal liaison of the Iowa Attorney General’s Office, Jeff Peterzalek, who is convinced that wagering on sports and on sports contests are two different categories, covered by different sections of the law, and the wording in the section that allows for betting through sports contests to be approved does not match the wording in the section regarding actual sports.

“In my legal opinion, it would not be allowed under Chapter 99f for sports wagering. There are multiple reasons for that. First of all, as with any statute, words matter. And the words in Chapter 99e (regarding fantasy sports) are substantially different than in 99f. You also have to keep in mind that what we approved in the prior agenda item wasn’t because esports were a sport or an authorized sporting event, it was because they were a simulated game or contest, which is expressly allowed under 99e. There is no such language in 99f.”

Jeff Peterzalek, Legal Liaison, Office of the Iowa Attorney General

IGA Does Not Give Up

The outcome of the meeting did not satisfy the President of IGA, Wes Ehrecke, who reluctantly accepted the AG liaison’s legal opinion that words do matter. As the wording in the bill does not specifically include esports, the IGA is refusing to give up, focusing on approaching the legislature to ask for clarification whether the simulated sports competitions can be included as an acceptable form for wagering.

The IGA was seeking an extra lift for the casino’s sports books which have been significantly impacted by the suspension of the major sports leagues as well as the March Madness, the event that generates the most interest betting-wise.

“…Esports is one of the fastest-growing areas for fan base. It could be really worthwhile to include that for people who want to wager on their favorite teams in esports in addition to what they might do for the traditional sports.”

Wes Ehrecke, President, IGA

Recent data from the IRGC suggested that the sports betting market in Iowa is slowly beginning to recover from April’s lows revenue-wise, with the most activity coming from mobile operations. Total amount of wagers in May jumped to $7 million, a significant improvement from the all-time low in April, $1.6 million.