HSB 80 (LSB 1488YC (7) 91)

HOUSE FILE _____ 

BY  (PROPOSED COMMITTEE ON WAYS AND MEANS BILL BY CHAIRPERSON KAUFMANN)

A BILL FOR

An Act concerning the licensing and regulation of gambling games, including a moratorium on the issuance of new licenses, providing fees, and including effective date and retroactive applicability provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 99F.4, subsection 24, Code 2025, is amended to read as follows:
   24.  a.  To conduct a socioeconomic study on the impact of gambling on Iowans, every eight years beginning in calendar year 2013, and issue a report on that study. The commission shall ensure that the results of each study are readily accessible to the public.
   b.  The report on the study must include all of the following:
   (1)  Information on the financial and societal impact of gambling.
   (2)  An analysis of problem gambling and treatment programs.
   (3)  An evaluation of existing excursion gambling boats, gambling structures, and pari-mutuel racetracks located in rural areas or near the state border, if a new license is awarded.
   (4)  A comprehensive assessment of potential gambling market conditions.
   (5)  An evaluation of the effects on the gambling market from competitive gambling locations located within sixty miles of the state.
   (6)  An evaluation of the effects on attracting out-of-state tourists to existing excursion gambling boats, gambling structures, and pari-mutuel racetracks located near the state border.
   (7)  An evaluation of the effects on existing qualified sponsoring organizations and potential reductions in annual distributions made by the sponsoring organization, if a new license is awarded.
   (8)  The percentage ownership of existing gambling boats, gambling structures, and pari-mutuel racetracks by residents of this state versus any applicant.
   (9)  A comprehensive study of new potential adjusted gross receipts after awarding a new license and the level of gambling saturation with a sixty-mile radius of any existing excursion gambling boat, gambling structure, or racetrack enclosure.
   (10)  Criminal statistics near existing excursion gambling boats, gambling structures, or racetrack enclosures, and near any potential locations of an excursion gambling boat, gambling structure, or racetrack enclosure.
   (11)  An analysis of the impact on community services, including public safety expenditures, fire protection, infrastructure improvements, and other capital project expenditures in counties.
    Sec. 2.  NEW SECTION.  99F.5A  Limitations on issuance of licenses to conduct gambling games.
   1.  a.  Commencing January 1, 2025, through June 30, 2030, the total number of licenses issued by the commission to conduct gambling games on an excursion gambling boat, at a gambling structure, or at a pari-mutuel racetrack shall not exceed nineteen subject to the requirements of this subsection.
   b.  Licenses to conduct gambling games shall be restricted to those counties where an excursion gambling boat, gambling structure, or racetrack enclosure was operating and licensed to conduct gambling games on January 1, 2025.
   c.  The commission shall be authorized to take any of the following actions concerning the issuance of licenses to conduct gambling games:
   (1)  A gambling games licensee may move to a new location within the same county and retain the gambling games license.
   (2)  A licensed facility may be sold and a new gambling games license issued for operation in the same county.
   (3)  If a license to conduct gambling games is surrendered, not renewed, or revoked, a new gambling games license may be issued for operation in the same county.
   2.  On or after July 1, 2030, the commission shall not issue a new license until after the commission has issued the required report on the socioeconomic study on the impact of gambling on Iowans due for calendar year 2029 in accordance with section 99F.4, subsection 24.
   3.  This section is repealed July 1, 2031.
    Sec. 3.  Section 99F.6, subsection 5, Code 2025, is amended to read as follows:
   5.  Before a license is granted, an operator of an excursion gambling boat shall work with the economic development authority to promote tourism throughout Iowa and encourage tourism from other states. Tourism information from local civic and private persons may be submitted for dissemination.  The commission shall not issue a new license for a new location that would negatively impact an existing licensee located in a county contiguous to the Iowa border or located in a county that qualifies as a rural county. For purposes of this subsection, “rural county” means a county with a population of less than thirty thousand as determined by the most recent population estimate produced by the United States bureau of the census or the most recent decennial census released by the United States bureau of the census.
    Sec. 4.  Section 99F.6, Code 2025, is amended by adding the following new subsection:
   NEW SUBSECTION.  10.  a.  The commission shall not issue a new license to conduct gambling games if the commission finds the approval of a new license would cause or do any of the following:
   (1)  Negatively impact the adjusted gross receipts of an existing excursion gambling boat, gambling structure, or racetrack enclosure by more than ten percent.
   (2)  Negatively impact the annual distributions of an existing qualified sponsoring organization.
   b.  If the commission does not issue a new license to conduct gambling games in a county, another application shall not be submitted for that county for eight years from the date of the decision not to issue the license.
    Sec. 5.  Section 99F.10, subsection 8, Code 2025, is amended to read as follows:
   8.  a.  In addition to any other fees required by this chapter, a person awarded a new license to conduct gambling games pursuant to section 99F.7 on or after January 1, 2004, shall pay the applicable initial license fee to the commission as provided by this subsection. A person awarded a new license shall pay one-fifth of the applicable initial license fee immediately upon the granting of the license, one-fifth of the applicable initial license fee within one year of the granting of the license, one-fifth of the applicable initial license fee within two years of the granting of the license, one-fifth of the applicable initial license fee within three years of the granting of the license, and the remaining one-fifth of the applicable initial license fee within four years of the granting of the license. However, the license fee provided for in this subsection shall only apply when a new license is issued to a person for a facility that increases the number of licensed facilities in the applicable county or counties. Fees paid pursuant to this subsection are not refundable to the licensee.
   b.  (1)  The initial license fee set forth in this subparagraph is subject to adjustment pursuant to subparagraph (2).  For purposes of this subsection, the applicable initial license fee shall be five million dollars if the population of the county where the licensee shall conduct gambling games is fifteen thousand or less based upon the most recent federal decennial census, shall be ten million dollars if the population of the county where the licensee shall conduct gambling games is more than fifteen thousand and less than one hundred thousand based upon the most recent federal decennial census, and shall be twenty million dollars if the population of the county where the licensee shall conduct gambling games is one hundred thousand or more based upon the most recent federal decennial census.
   (2)  (a)  For purposes of this subparagraph:
   (i)  “Annual inflation factor” means the same as defined in section 422.4.
   (ii)  “Cumulative inflation factor” means the product of the annual inflation factor for the calendar year beginning on January 1, 2004, and all annual inflation factors for subsequent calendar years as determined pursuant to this subparagraph. The cumulative inflation factor applies to years beginning on or after January 1 of the calendar year for which the latest annual inflation factor has been determined.
   (iii)  The annual inflation factor for the calendar year beginning on January 1, 2004, is one hundred percent.
   (b)  Commencing with the calendar year beginning January 1, 2005, and for each calendar year thereafter, the commission shall determine the latest cumulative inflation factor for each calendar year, and multiply each applicable initial license fee in subparagraph (1) by the applicable cumulative inflation factor, and shall round off the resulting product to the nearest one dollar, and such resulting product shall be the initial license fee in subparagraph (1) for the year a new license is awarded.
   c.  Moneys collected by the commission from an initial license fee paid under this subsection shall be deposited in the rebuild Iowa infrastructure fund created in section 8.57.
    Sec. 6.  INTERNET GAMING —— REVIEW.
   1.  The state racing and gaming commission shall initiate and coordinate an independent review of regulation frameworks and the various components implementing internet gaming in the state and its impact on the state’s gaming industry.
   2.  a.  The review must take into account the policy objectives of ensuring and preserving Iowa’s competitiveness in the gaming industry and may consider all of the following: recent trends in Iowa gaming revenue and the correlation to gaming attendance at brick and mortar casino locations and a comparison to gaming trends in other states; estimates of the potential impact on Iowa gaming revenues, profitability, and how that might impact Iowa jobs, business vendors, nonprofit fund sharing, and tax revenues; and the societal impact of internet gaming and how to ensure safety and security for Iowa consumers.
   b.  The review must analyze and report on the illegal gambling market and the illegal internet gambling market including all of the following: societal impacts, underage access, the integrity of illegal gambling games, the payment of winnings, anti-money laundering aspects, and identity theft.
   c.  The review must include an assessment of the effectiveness of problem gambling services in the state.
   d.  The review must include an assessment of the direct and indirect employment effects on the surrounding communities where existing licensees are located.
   3.  The review must include recommendations for changes in law and administrative rules and identification of internet gaming laws and procedures of other states that, if adopted in Iowa, could enhance and preserve the competitiveness of the existing gaming industry in the state.
   4.  The state racing and gaming commission shall, and existing licensees and other interested persons may, participate in the review. The commission may utilize additional services to assist in the coordination of the review and preparation of the report. The commission shall submit a report with findings and recommendations to the general assembly by January 1, 2026.
    Sec. 7.  EFFECTIVE DATE.  This Act, being deemed of immediate importance, takes effect upon enactment.
    Sec. 8.  RETROACTIVE APPLICABILITY.  This Act applies retroactively to January 1, 2025.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill concerns the licensing and regulation of gambling games. Under current law, the state racing and gaming commission (commission) is required to conduct a socioeconomic study on the impact of gambling on Iowans every eight years. The bill identifies certain topics the commission must examine for this socioeconomic study, and prohibits the commission from issuing a new license on or after July 1, 2030, until the required report on the socioeconomic study has been issued by the commission for 2029.
   The bill places a moratorium on the issuance of new licenses to conduct gambling games in excess of 19 licenses from January 1, 2025, through June 30, 2030. The bill restricts gambling games licenses to those counties conducting gambling games on January 1, 2025. The bill allows the commission to authorize a gambling games licensee to move to a new location within the same county, to issue a gambling games license in a county if a licensed facility in that county is sold, and to issue a new license in a county if a previous license to conduct gambling games in that county was surrendered, not renewed, or revoked.
   Before a license is granted, the bill requires an operator of an excursion gambling boat to work with the economic development authority to encourage tourism from other states. The bill prohibits the commission from issuing a new gambling games license to an excursion gambling boat if the new license would impact an existing licensee located in a county contiguous to the Iowa border or a “rural county” (a county with a population less than 30,000).
   The bill prohibits the commission from issuing a new gambling games license if the new license would negatively impact the adjusted gross receipts of an existing gambling games licensee by more than 10 percent, or negatively impact the annual distributions of an existing qualified sponsoring organization. If the commission does not issue a gambling games license in a county, another applicant cannot apply for a license in the same county for eight years from the date of the decision not to issue.
   The bill places an inflation adjustment on the initial license fees in Code section 99F.10(8).
   The bill requires the commission to study internet gaming and its impact on the state’s gaming industry and to issue a report with findings and recommendations to the general assembly by January 1, 2026.
   The bill takes effect upon enactment and applies retroactively to January 1, 2025.