H.F. 2089 Section 1. Section 99F.6, subsection 4, paragraph a, 1 subparagraph (2), Code 2026, is amended to read as follows: 2 (2) (a) A qualified sponsoring organization licensed to 3 operate gambling games under this chapter shall distribute 4 the receipts of all gambling games, less reasonable expenses, 5 charges, taxes, fees, and deductions allowed under this 6 chapter , as winnings to players or participants or shall 7 distribute the receipts for educational, civic, public, 8 charitable, patriotic, or religious uses as defined in section 9 99B.1 . A qualified sponsoring organization shall provide that 10 any organization exempt from federal income taxes under section 11 501(c)(19) of the Internal Revenue Code, as defined in section 12 422.3 , shall be eligible for a distribution of adjusted gross 13 receipts for educational, civic, public, charitable, patriotic, 14 or religious uses as required by this subparagraph. However, a 15 licensee to conduct gambling games under this chapter shall, 16 unless an operating agreement for an excursion gambling boat 17 otherwise provides, distribute at least three percent of the 18 adjusted gross receipts and, if applicable, three-quarters of 19 one percent of sports wagering net receipts for each license 20 year for educational, civic, public, charitable, patriotic, 21 or religious uses as defined in section 99B.1 , as provided in 22 subparagraph division (b) . However, if a licensee who is also 23 licensed to conduct pari-mutuel wagering at a horse racetrack 24 has unpaid debt from the pari-mutuel racetrack operations, 25 the first receipts of the gambling games operated within the 26 racetrack enclosure less reasonable operating expenses, taxes, 27 and fees allowed under this chapter shall be first used to pay 28 the annual indebtedness. 29 (b) (i) A licensee making a required distribution for 30 educational, civic, public, charitable, patriotic, or religious 31 uses pursuant to subparagraph division (a) shall distribute at 32 least seventy-five percent of the moneys on a pro rata basis, 33 as provided in subparagraph subdivision (ii), for use in each 34 Iowa county whose residents contributed to the gambling games 35 -1- LSB 5579YH (6) 91 ss/ns 1/ 4

H.F. 2089 or sports wagering receipts of the licensee. 1 (ii) The licensee shall collect and maintain records 2 to determine the county of residence of all players or 3 participants who contributed to the gambling games or sports 4 wagering receipts of the licensee and the amount of receipts 5 attributable to each player or participant. The distribution 6 to be made for use in each Iowa county shall be based on the 7 gross receipts generated by players or participants from 8 a given Iowa county in comparison to the total such gross 9 receipts generated by players or participants from all Iowa 10 counties. Receipts generated by persons who are not residents 11 of Iowa or whose county of residence cannot be verified shall 12 be distributed proportionally in each Iowa county based on the 13 distribution calculated for gross receipts generated by players 14 or participants from Iowa counties. 15 (iii) This subparagraph division (b) does not restrict the 16 distribution of gambling games or sports wagering receipts of 17 a licensee in excess of seventy-five percent of the moneys 18 distributed. Such receipts shall be distributed as otherwise 19 authorized or required by law. 20 (iv) A licensee shall file an annual report with the 21 commission that includes all of the following, which the 22 commission shall post publicly on the commission’s internet 23 site: 24 (A) The total amount of the licensee’s gambling games and 25 sports wagering receipts generated by residents of each Iowa 26 county. 27 (B) The total amount of the licensee’s gambling games 28 and sports wagering receipts generated by persons who are 29 not residents of Iowa or whose county of residence cannot be 30 verified. 31 (C) The total amount of moneys distributed by the licensee 32 under this subparagraph (2). 33 (D) The amount of moneys distributed to each Iowa county by 34 the licensee under this subparagraph (2). 35 -2- LSB 5579YH (6) 91 ss/ns 2/ 4

H.F. 2089 (v) (A) A licensee who fails to comply with this 1 subparagraph division (b) shall be subject to a civil 2 penalty not to exceed five percent of the total amount of 3 moneys required to be distributed by the licensee under this 4 subparagraph (2), to be imposed and collected by the commission 5 and deposited in the general fund of the state. 6 (B) The commission may order a licensee that fails to comply 7 with this subparagraph division (b) to redistribute the moneys 8 as required by law. 9 (C) A licensee that willfully or repeatedly fails to 10 comply with this subparagraph division (b) shall be subject 11 to additional discipline by the commission, which may include 12 suspension of the licensee’s license. 13 Sec. 2. APPLICABILITY. This Act applies to gambling 14 games and sports wagering receipts collected in a fiscal year 15 beginning on or after the effective date of this Act. 16 EXPLANATION 17 The inclusion of this explanation does not constitute agreement with 18 the explanation’s substance by the members of the general assembly. 19 This bill relates to the allocation of required nonprofit 20 distributions of gambling games and sports wagering receipts. 21 Under current law, most licensees are required to distribute 22 at least 3 percent of the licensee’s adjusted gross receipts 23 from gambling games and three-quarters of 1 percent of net 24 receipts from sports wagering to organizations dedicated to 25 civic, public, charitable, patriotic, or religious uses. The 26 bill requires 75 percent of these distributions to be made on 27 a pro rata basis for use in Iowa counties whose residents are 28 known to the licensee to have contributed to the gambling games 29 and sports wagering receipts of the licensee. 30 To calculate the percentage of a distribution that will 31 be made for use in each Iowa county, the bill requires the 32 licensee to collect and maintain records to determine the 33 county of residence of all players and participants who 34 contributed to the gambling games or sports wagering receipts 35 -3- LSB 5579YH (6) 91 ss/ns 3/ 4

H.F. 2089 of the licensee and the amount each player or participant 1 contributed to such receipts. The distribution to be made 2 for use in each Iowa county is based on the gross receipts 3 generated by players or participants from a given Iowa county 4 in comparison to the total such gross receipts generated by 5 players or participants from all Iowa counties. The bill 6 requires receipts generated by persons who are not residents 7 of Iowa or whose county of residence cannot be verified to be 8 distributed proportionally among Iowa counties based on the 9 same calculation. The bill does not restrict the distribution 10 of gambling games or sports wagering receipts in excess of 11 75 percent of the moneys distributed. The bill requires 12 each licensee to file an annual report with the state racing 13 and gaming commission (commission) regarding distributions 14 made by the licensee, which the commission shall post on the 15 commission’s internet site. 16 A licensee who fails to make distributions as required by 17 the bill shall be subject to a civil penalty not to exceed 18 5 percent of the total amount of moneys required to be 19 distributed by the licensee, to be collected by the commission 20 and deposited in the general fund of the state. The bill 21 allows the commission to order the redistribution of moneys 22 that are not distributed as required by the bill. The bill 23 also allows the commission to impose additional discipline on a 24 licensee that willfully or repeatedly fails to comply with the 25 bill, which may include suspension of the licensee’s license. 26 The bill applies to gambling games and sports wagering 27 receipts collected in a fiscal year beginning on or after the 28 effective date of the bill. 29 -4- LSB 5579YH (6) 91 ss/ns 4/ 4