Senate Study Bill 1027 - Introduced SENATE FILE _____ BY (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON DAWSON) A BILL FOR An Act relating to promotional play receipts, gambling games, 1 and sports wagering. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1453XC (4) 89 dg/rn
S.F. _____ Section 1. Section 99F.1, subsections 1, 25, and 30, Code 1 2021, are amended to read as follows: 2 1. “Adjusted gross receipts” means the gross receipts on 3 gambling games less winnings paid to wagerers on gambling games 4 and less promotional play receipts on gambling games. However, 5 for each fiscal year during the time period beginning July 1, 6 2021, and ending June 30, 2024, “adjusted gross receipts” does 7 not shall include promotional play receipts received after the 8 date in any fiscal year that the commission determines that 9 the wagering tax imposed pursuant to section 99F.11 on all 10 licensees in that fiscal year on promotional play receipts 11 exceeds twenty-five million eight hundred twenty thousand 12 dollars on gambling games . 13 25. “Promotional play receipts” means the total sums wagered 14 on gambling games with tokens, chips, electronic credits, or 15 other forms of cashless wagering provided by the licensee 16 without an exchange of money as described in section 99F.9, 17 subsection 3 . 18 30. “Sports wagering net receipts” means the gross receipts 19 less winnings paid to wagerers and less promotional play 20 receipts on sports wagering. 21 Sec. 2. Section 99F.6, subsection 4, paragraph a, 22 subparagraphs (3) and (5), Code 2021, are amended to read as 23 follows: 24 (3) The commission shall authorize, subject to the debt 25 payments for horse racetracks and the provisions of paragraph 26 “b” for dog racetracks, a licensee who is also licensed to 27 conduct pari-mutuel dog or horse racing to use receipts 28 from gambling games and sports wagering within the racetrack 29 enclosure to supplement purses for races particularly for 30 Iowa-bred horses pursuant to an agreement which shall be 31 negotiated between the licensee and representatives of the 32 dog or horse owners. For agreements subject to commission 33 approval concerning purses for horse racing beginning on or 34 after January 1, 2006, the agreements shall provide that total 35 -1- LSB 1453XC (4) 89 dg/rn 1/ 3
S.F. _____ annual purses for all horse racing shall be four percent of 1 sports wagering net receipts and promotional play receipts on 2 sports wagering and no less than eleven percent of the first 3 two hundred million dollars of net receipts, and six percent of 4 net receipts above two hundred million dollars. In addition, 5 live standardbred horse racing shall not be conducted at the 6 horse racetrack in Polk county, but the purse moneys designated 7 for standardbred racing pursuant to section 99D.7, subsection 8 5 , paragraph “b” , shall be included in calculating the total 9 annual purses required to be paid pursuant to this subsection . 10 Agreements that are subject to commission approval concerning 11 horse purses for a period of time beginning on or after January 12 1, 2006, shall be jointly submitted to the commission for 13 approval. 14 (5) For purposes of this paragraph, “net receipts” means 15 the annual adjusted gross receipts from all gambling games 16 and, beginning July 1, 2024, promotional play receipts on all 17 gambling games less the annual amount of money pledged by the 18 owner of the facility to fund a project approved to receive 19 vision Iowa funds as of July 1, 2004. 20 Sec. 3. Section 99F.11, Code 2021, 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 play 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, 2021, and ending 32 June 30, 2022, seventy-five percent. 33 (2) For the fiscal year beginning July 1, 2022, and ending 34 June 30, 2023, fifty percent. 35 -2- LSB 1453XC (4) 89 dg/rn 2/ 3
S.F. _____ (3) For the fiscal year beginning July 1, 2023, and ending 1 June 30, 2024, twenty-five percent. 2 c. This subsection is repealed July 1, 2024. 3 EXPLANATION 4 The inclusion of this explanation does not constitute agreement with 5 the explanation’s substance by the members of the general assembly. 6 This bill concerns promotional play receipts for purposes of 7 Code chapter 99F governing gambling games and sports wagering. 8 Code section 99F.1, concerning definitions, is amended. 9 The bill amends the definition of adjusted gross receipts on 10 gambling games to provide that adjusted gross receipts includes 11 promotional play receipts through June 30, 2024, and excludes 12 them thereafter. Currently, adjusted gross receipts includes 13 promotional play receipts until the date in any fiscal year 14 that the wagering tax on the portion of adjusted gross receipts 15 representing promotional play receipts exceeds $25,820,000. 16 The bill also amends the definition of sports wagering net 17 receipts to exclude promotional play receipts on sports 18 wagering. 19 Code section 99F.6, concerning applicant requirements, is 20 amended to provide that promotional play receipts on sports 21 wagering and gambling games shall be included for purposes of 22 determining total annual purses for horse racing. 23 Code section 99F.11, establishing tax rates for gambling 24 games and sports wagering, is amended. The bill establishes 25 a new subsection that provides for a different tax rate to be 26 applied to promotional play receipts as a portion of adjusted 27 gross receipts on gambling games. The bill provides that the 28 applicable tax rate is the rate applied per licensee pursuant 29 to subsection 2 multiplied by an adjusted percentage. The bill 30 provides that the adjusted percentage for FY 2021-2022 is 75 31 percent; for FY 2022-2023, 50 percent; and for FY 2023-2024, 25 32 percent. This new subsection is repealed July 1, 2024. 33 -3- LSB 1453XC (4) 89 dg/rn 3/ 3