House Study Bill 719 would lower taxes for the state’s commercial casinos, which would allow those companies to reinvest in their properties to combat competition from new casinos cropping up in neighboring states.
Let’s examine the latest updates on this potential tax relief and its impact on top-rated sportsbooks.
A Different Approach
It’s not often we hear of legislators lowering taxes on gaming companies but Iowa is considering doing precisely that. The idea has been bandied about because of competition in neighboring states whose shiny news gambling palaces may woo customers from Iowa’s older and less glitzy casinos.
The money the casinos would save in taxes could be reinvested into their facilities, warding off the potential customer drain facing the industry in Iowa.
New casino projects in Illinois and Nebraska have Iowa’s 19 casinos apprehensive about the future; therefore, the proposed tax relief is welcome indeed. Those casinos earning at least $3 million in revenue would see their taxes begin to drop one percent every year for three years, which would mean the current 22% tax would be scaled down to 19% in Fiscal Year 2026-2027.
Rolling the Dice
Representative Jane Bloomingdale pointed out that tax cuts are being discussed all over, including the governor’s proposal to lower Iowa’s state income tax rate. However, until now, no consideration has been given to tax relief for the state’s casinos.
“We’re lowering taxes for individuals, we’re lowering taxes for corporations, but we’re not lowering taxes for casinos. It just doesn’t seem fair. If we’re going to lower taxes for everyone across the state of Iowa, we maybe need to look at everyone.”
Gambling revenue, including table games, slots and sports betting, combined for north of $4 billion in Iowa in FY 2023. However, this year those numbers are slightly down, which could be an omen for things to come. Nebraska casinos are taxed at 20%, while Illinois hits casinos with revenues up to $25 million at 15%.
Doug Struyk, representing Great River Entertainment and Caesars Entertainment, said, “It will take additional investment in the facilities in Iowa to continue to be bright, shining new attractions, to keep people wanting to come over.”
Pushback Expected
Iowa’s infrastructure projects and social programs that receive portions of the casinos’ $4 billion tax check are already complaining that lesser funding will have a deleterious effect across the board. Representative Monica Kurth said, “A downturn in the money brought in, I think could hurt those programs. I think we’re talking probably about double-digit millions that that tax cut would give.”
The Rebuild Iowa Infrastructure Fund budget receives more than 54% of the state’s casino revenues, which means the highways and byways from Davenport to Sioux City would be impacted more than any other project.
Still, Representative Bloomingdale pointed out the positive contributions the casinos make to the communities in which they reside. “Every fire department has a new fire truck, every church has a new roof, every cemetery has tombstones that have been fixed, on a paved road. So, I look at the things that they’ve done in our communities that, you know, if they have 1% more income, that money would go directly into our communities.”
