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How Iowa’s Trailblazing in Online Sports Betting Affected Online Casinos


This news story was published on July 10, 2020.
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Iowa has been one of the states that has embraced the idea of online sports betting over the last two years. However, while state legislators have favored sports betting at online sportsbooks, they remain unlikely to take a similar stance for online casinos. Still, positive steps have been taken in Iowa’s iGaming market recently. 

Because of federal changes, Iowa lawmakers were able to adopt online sports betting throughout the state. Any hopes that this positive would extend to online casinos were quickly dashed. That said, it is important to remember that gambling at the online casinos is legal for individuals who live in Iowa. 

We’ll get to the legality of playing at online casinos in Iowa, but first let’s look at how the state is opening its doors to online gambling. 

Embracing Online Sports Betting

2018 was a pivotal year for the sports betting market in the United States. Since 1992, the Professional and Amateur Sports Protection Act (PASPA) hung like a shadow over the sports wagering market. This piece of legislation essentially meant sports betting was illegal across the country. 

The only exceptions were states that already had a sports betting market in place. This meant  Nevada, which was the only state with any kind of meaningful sportsbook infrastructure before PASPA was passed. 

For nearly two decades, online sports betting was off the table unless customers were willing to jump through several loopholes. In 2018, the situation changed when federal lawmakers abolished PASPA and allowed individual states to make their own decision on sports betting. 18 states quickly developed frameworks for legal online sports wagering… Iowa among them. 

Since August 15, 2019, retail and mobile (online) sports betting has been legal in the state, through regulated applications. 

No Such Luck for Online Casinos

This iGaming goodwill has not been extended to online casinos, which remain illegal in Iowa. More accurately, it is illegal for an online casino operation to be founded and operated within the state. While lawmakers were willing to embrace online sports betting, they would not do the same for casinos. 

It seems this decision was taken to protect the 20 or so land-based casinos that operate in Iowa. It is worth noting, most of these brick-and-mortar venues are used for the online sportsbook regulation discussed above.  

So, does this mean people from Iowa cannot play at online casinos? No quite, and the nuance is in the details. Iowa prevents any online casino from operating within state limits, but it does not prevent customers from looking for online casinos regulated in other regions. This means Iowans can head to online casinos in other states or abroad. 

This is a nice loophole that many people have been using for years, including for sports betting during the days of PASPA. Of course, heading out-of-state for online gambling means patrons must be extra cautious to select a reputable online venue that is properly secure and adheres to international gambling standards. 

Maybe one day, Iowa will be as proactive in embracing online casinos as it has been in the sports betting market.

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