Iowa sports betting could surge with end of in-person registration

Iowa took a “monumental step” in its development as a sports betting industry on New Year’s Day with the expiration of the state’s in-person registration requirement to bet online according to analysts for PlayIA, which tracks Iowa’s legal sports betting and gambling industries.

The move, it said, opens the door to exponential growth that should generate billions of dollars in annual wagers.

Jessica Welman, analyst for PlayIA.com, stated: “The in-person registration requirement has unquestionably stunted the growth of Iowa’s online sports betting market, which is the main engine in every state where it is legal.

“With the requirement in place, Iowa would have never reached its potential as a market. Letting the requirement to expire is akin to correcting a mistake, and we expect Iowa to finally begin to blossom because of that correction.”

The analysts projected in 2019 that within five years Iowa would grow into a market that generated more than $4bn in bets annually, more than $300m a year in operator revenue, and more than $20m a year in state taxes. But since launching in August 2019, Iowa has generated a total of $682.6m in wagers and $53.4m revenue, according to official statistics. That has produced $3.7m in state taxes.

Iowa’s start has unquestionably been muted by in-person registration, which required that online bettors sign up in-person at a physical sportsbook.

Illinois launched earlier this year with an in-person registration requirement and then suspended it over the summer. The effect on that market was immediate. With just one operator, Illinois grew wagers to $52.5m in July 2020 from $8.3m in June 2020 and saw an immediate influx of 230,000 mobile sports betting accounts in the days after the state lifted in-person registration requirements, all as a slew of new operators launched.

In the months since, Illinois has grown to the fourth largest market in the US, generating $434.4m in wagers in October 2020 alone.

“Illinois showed just how much drag in-person registration puts on a market,” said Dustin Gouker, analyst for PlayIA.com. “It was an uneven, unsure start, but almost as soon as the registration requirement was lifted the market embarked on an expansion that has been the most rapid in US history.”

In November, Iowa ranked No. 7 among states where sports betting is legal with a state record $87.2m in wagers. That still significantly lagged behind No. 6 Colorado, which has about twice the population as Iowa but attracted $231.2m in November bets.

Home to some of the best-known brands in online sports betting, operators’ interest in the Hawkeye State has already increased. BetMGM, one of the largest operators in the US, launched on Monday. And more could come soon.

“With a fair tax rate and strong regulatory framework, Iowa was already an attractive market for operators,” Welman advised. “This was the missing piece. With the in-person registration requirement now gone, Iowa can truly reach its potential as a sports betting market.”

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