A proposed sports betting bill by the Iowa Department of Public Safety was submitted for approval in a legislative state hearing at the Capitol. The bill aims to penalize proxy betting and account sharing, and it would prohibit these activities and make them a crime under state law.

The Iowa Department of Public Safety has introduced a bill that would make it a crime to share a sports betting account or place bets on behalf of another person. The proposed legislation, Senate Study Bill 1097, aims to close a loophole in state law by formally prohibiting account sharing and proxy betting, aligning Iowa's legal framework with existing administrative rules.

The proposal was discussed during a legislative hearing at the Iowa Capitol on Wednesday. While Iowa's administrative rules already state that both proxy betting and account sharing are illegal, current state law lacks explicit language to prosecute individuals engaging in these activities. A representative from the Iowa Department of Public Safety testified that law enforcement officers currently have no legal mechanism to charge offenders.

Addressing legal gaps in sports betting

The proposed bill would amend Iowa's illegal gaming statutes to include proxy betting and account sharing. State Senator Dan Dawson from Council Bluffs, who is also an Iowa State Trooper, emphasized the importance of formally integrating these provisions into the law.

"It's the reality (that) Iowa is at the forefront of sports betting," Dawson said to the media after the hearing. "If things could have been drafted differently, or some of these things could have been foreseen, it would have gone in (the original state law that passed in 2019)." He went on to note that the Iowa Racing and Gaming Commission did a great job by putting this in the administrative rule, but this bill codifies that.

Iowa legalized sports betting in 2019, becoming a leading state in the industry. However, recent controversies have highlighted the need for stronger regulatory measures. For instance, in 2023, more than two dozen student-athletes from Iowa State University and the University of Iowa faced investigations for illegal sports betting. Many ultimately pleaded guilty to underage gambling and paid fines to have identity theft charges dismissed.

Legal challenges and controversies

In March 2024, prosecutors dropped charges against several Iowa State student-athletes after concluding that state investigators had exceeded their legal authority by using geofencing technology without a warrant. The following month, 26 student-athletes sued the Iowa Division of Criminal Investigation, arguing their constitutional rights had been violated. That lawsuit is ongoing, now focusing on three individual DCI employees.

Although Dawson stated the proposed bill was not a response to these cases, emails from state investigators in 2023 revealed a belief that Iowa's laws needed to be updated to explicitly criminalize proxy betting.

Stakeholder reactions and legislative outlook

As of now, the Iowa Behavioral Health Association, which is in opposition of gambling, is the only organization that has officially taken a position on the proposed legislation, registering in support of the bill. Lobbyists representing sports betting companies attended the subcommittee hearing but have yet to formally oppose or support the measure.

During the hearing, State Senator Janet Petersen from Des Moines argued that more responsibility for preventing illegal betting should fall on sports betting companies rather than individuals or state law enforcement. "To me, it seems like the front-end safeguards are clearly not there," said Petersen. "Kids should not be gaming. The companies that can afford to put safeguards in place, they're clearly not doing it."

Despite differing views on enforcement responsibility, the bill received the necessary support to advance. Senators Dawson and Tom Shipley from Nodaway signed off on moving the legislation forward. The bill is now eligible for consideration by the full Senate Judiciary Committee.