House Study Bill 512 - Introduced HOUSE FILE _____ BY (PROPOSED COMMITTEE ON STATE GOVERNMENT BILL BY CHAIRPERSON KAUFMANN) A BILL FOR An Act relating to wagering taxes imposed on promotional play 1 receipts. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 5623YC (3) 88 ec/rn

H.F. _____ Section 1. Section 99F.1, subsections 1, 25, and 30, Code 1 2020, are amended to read as follows: 2 1. “Adjusted gross receipts” means the gross receipts less 3 winnings paid to wagerers and less promotional play receipts 4 on gambling games. However, for each fiscal year during the 5 time period beginning July 1, 2020, and ending June 30, 2024, 6 “adjusted gross receipts” does not shall include promotional 7 play receipts received after the date in any fiscal year 8 that the commission determines that the wagering tax imposed 9 pursuant to section 99F.11 on all licensees in that fiscal year 10 on promotional play receipts exceeds twenty-five million eight 11 hundred twenty thousand dollars on gambling games . 12 25. “Promotional play receipts” means the total sums wagered 13 on gambling games with tokens, chips, electronic credits, or 14 other forms of cashless wagering provided by the licensee 15 without an exchange of money as described in section 99F.9, 16 subsection 3 . 17 30. “Sports wagering net receipts” means the gross receipts 18 less winnings paid to wagerers and less promotional play 19 receipts on sports wagering. 20 Sec. 2. Section 99F.11, Code 2020, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 2A. a. Notwithstanding any provision 23 of this section to the contrary, the tax rate imposed on a 24 licensee each fiscal year on any amount of promotional pay 25 receipts on gambling games included as adjusted gross receipts 26 shall be determined by multiplying the adjusted percentage 27 by the wagering tax applicable to the licensee pursuant to 28 subsection 2. 29 b. For purposes of this subsection, “adjusted percentage” 30 means as follows: 31 (1) For the fiscal year beginning July 1, 2020, and ending 32 June 30, 2021, eighty percent. 33 (2) For the fiscal year beginning July 1, 2021, and ending 34 June 30, 2022, sixty percent. 35 -1- LSB 5623YC (3) 88 ec/rn 1/ 2

H.F. _____ (3) For the fiscal year beginning July 1, 2022, and ending 1 June 30, 2023, forty percent. 2 (4) For the fiscal year beginning July 1, 2023, and ending 3 June 30, 2024, twenty percent. 4 c. This subsection is repealed July 1, 2024. 5 EXPLANATION 6 The inclusion of this explanation does not constitute agreement with 7 the explanation’s substance by the members of the general assembly. 8 This bill concerns the taxation of promotional play receipts 9 for purposes of Code chapter 99F governing gambling games and 10 sports wagering. 11 Code section 99F.1, concerning definitions, is amended. 12 The bill amends the definition of adjusted gross receipts on 13 gambling games to provide that adjusted gross receipts includes 14 promotional play receipts through June 30, 2024, and excludes 15 them thereafter. Currently, adjusted gross receipts includes 16 promotional play receipts until the date in any fiscal year 17 that the wagering tax on the portion of adjusted gross receipts 18 representing promotional play receipts exceeds $25,820,000. 19 The bill also amends the definition of sports wagering net 20 receipts to exclude promotional play receipts on sports 21 wagering. 22 Code section 99F.11, establishing tax rates for gambling 23 games and sports wagering, is amended. The bill establishes 24 a new subsection that provides for a different tax rate to be 25 applied to promotional play receipts as a portion of adjusted 26 gross receipts on gambling games. The bill provides that the 27 applicable tax rate is the rate applied per licensee pursuant 28 to subsection 2 multiplied by an adjusted percentage. The bill 29 provides that the adjusted percentage for FY 2020-2021 is 80 30 percent, for FY 2021-2022, 60 percent, for FY 2022-2023, 40 31 percent, and for FY 2023-2024, 20 percent. This new subsection 32 is repealed July 1, 2024. 33 -2- LSB 5623YC (3) 88 ec/rn 2/ 2