Iowa Considers Legalizing Online Poker

Kyle Devaney once walked away from a game of Texas Hold ’Em $500 richer.
But the 23-year-old didn’t win the money in a casino or in a friendly game with his friends — he did it online.

A University of Iowa senior, Devaney has been playing online poker for nearly six years. And, technically, he is breaking the law — but it’s one that’s rarely enforced.
Online gambling is illegal, untaxed, and unregulated in all 50 states, but that could change under a bill making its way through the Iowa legislature.

Federal law allows states to legalize online gambling within their borders. On March 1, an Iowa Senate subcommittee approved a controversial bill that would legalize and regulate intrastate-only online poker. It now need to pass the full Senate, and then the House, to become law. If passed, Iowa would be the first state to legalize online poker, though similar legislation is being considered in Florida and California.

Iowa would be the first state under Senate Study Bill 1165 to issue online poker licenses to qualified businesses. People wanting to participate in the legal online poker would register for an account at one of the licensed businesses, put money into an account at a local casino, and play poker on a regulated website. The Iowa Racing and Gaming Commission would oversee the system.

Lobbyists say roughly 150,000 Iowans are illegally playing online poker; supporters contend that the move could bring in $30 million to $35 million in taxes each year. Supporters said the change could create a major source of revenue that the state is currently not getting.

Ned Chiodo, a lobbyist in favor of the bill said “The online poker industry now is not contributing monetarily to society in the United States or in Iowa, with the passage of this bill, the revenue that this industry will generate will be taxed.”

While it would likely bring helpful economic benefits, the bill has drawn bipartisan concern from legislators concerning the ethics of gambling.

“This issue reaches past party lines,” said Rep. Dave Jacoby, D-Coralville. “Democrats won’t want to vote for it because gambling breaks up families and causes social problems, and some Republicans are against it for religious reasons.”