Iowa Gaming Regulator Rejects Esports Betting Request, Approves Fantasy Esports

  • Iowa Racing and Gaming Commission refused Iowa Gaming Association's proposal
  • It approved DraftKings' request to allow Iowans to partake in daily fantasy esports on its website
  • Reason for commission's refusal down to wording of sports betting legislation
  • IGA next likely to ask for clarification on whether casino sportsbooks can offer esports betting
female esports gamer playing at her computer
The Iowa Racing and Gaming Commission has rejected a request from the IGA to allow esports betting in the state. [Image: Shutterstock.com]

Proposal refused, another approved

The Iowa Racing and Gaming Commission rejected a request from the Iowa Gaming Association (IGA) to allow esports betting in the state. No vote was taken on the proposal during a meeting held Thursday at the Grand Falls Casino and Resort in Larchwood.

no vote was taken on the proposal

However, another esports-related matter did get the commission’s approval. This concerned DraftKings’ request for Iowans to be able to take part in daily fantasy esports contests through its website. The commission voted 5-0 in favor.

The Boston-based daily fantasy sports and sports betting operator currently has three sportsbooks in Iowa, namely in Emmetsburg, Jefferson, and Clinton. 

Reason for the rejection

The Iowa Racing and Gaming Commission referred its decision on esports betting to its legal liaison officer, Jeff Peterzalek, from the Iowa Attorney General’s Office. 

In his legal opinion, esports betting is not allowable as per Chapter 99f of the state’s sports betting regulations. He stated that the wording of the different statutes mattered, with Chapter 99e concerning fantasy sports having “substantially different” wording from that used in Chapter 99f on sports betting. 

Peterzalek explained: “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.”

The IGA’s reaction

IGA president Wes Ehrecke reacted to the commission’s decision by outlining the likely next step of asking the legislature to clarify whether it would be acceptable for casino sportsbooks to offer esports betting. While the state’s sportsbooks are slowly getting back to action as sporting events resume, Ehrecke believes esports betting would be a welcome boost. 

esports betting would be a welcome boost

Ehrecke maintained: “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.”

Sports betting and daily fantasy sports betting activity has been legal in Iowa since Governor Kim Reynolds signed a bill into law in May 2019.

The growing popularity of esports

Esports has been rapidly growing in popularity in recent years. Video game competitions often have prize purses of millions of dollars, with the esports fan base viewing the leading players in the same light as traditional sports stars. Numerous colleges in the United States, such as the University of Oklahoma and the University of Missouri, now have esports programs in place.  

Esports events are often broadcasted on networks such as ESPN. Betting activity on esports increased during the coronavirus pandemic in the absence of traditional sporting events. Numerous betting operators were seen investing in their esports offerings as a result.

DraftKings recently added a number of esports options to its daily fantasy and sports betting offerings where allowable. Only a few states have so far allowed esports betting activity.