, Photo by The state of Iowa still not certain in its decision to change the sports gambling rules. Laws & Regulations

A Legislative Panel Delays Debt Collecting from Sports Betting Winnings

By Lisa Spencer Senior Editor Updated: 17 August 2019

Lisa Spencer Senior Editor

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Several casinos in Iowa made a request to delay the rules regarding the collection of debt from sports betting winnings. This Monday, it was approved by the Iowa Administrative Rules Review Committee, with the goal to give lawmakers time to draft a new bill next year. It has to clarify how they want debts collected against sports betting winnings.

Brian Ohorilko, who is the Iowa Racing and Gaming administrator, said that together with two other states, Iowa plans to scoop up the winnings of sports bettors to pay state debt or child support. While Maine and Indiana have not gone live with sports betting just yet, Iowa bettors can start placing their bets at noon Thursday.

So far, the rules that regulate Iowa sports betting authorized casinos to ask gamblers for their Social Security numbers only when they win $1,200. This way, the casinos can check the names of such winners with a database of people late on criminal fines, child support, and taxes. Slot machine players are expected to report $1,200 winnings for tax purposes, which is the federal threshold. For the last decade, Iowa has been checking that database to find out if slot winners owed money. Even though the official rules and legal betting start date are finalized, the matter of debt collecting remains to be cleared.

Wes Ehrecke, who is the president of the Iowa Gaming Association, said that the state of Iowa has gotten $34 million in owed debt returned from slot winnings. The Iowa Gaming Association is a trade group that represents 19 commercial casinos in the state.

However, federal guidelines state that a sports bettor should have won $600 or more before casinos have to ask for their Social Security number, and only when that amount is 300 times the wager or more. This presents a strange situation, as Iowa’s rules could put casino operators in an awkward position in which they ask for the Social Security numbers of sports bettors when winners have no legal obligation to disclose such information. Wes Ehrecke also said casinos will propose a new bill in 2020, one that aligns these amounts with the federal tax requirements. The bill would also include table games, such as roulette and blackjack to allow debts to be collected on other gambling winnings.

Come next session we’ll bring forth a bill hopefully that will have bipartisan support for to clarify that to the federal guidelines.

stated Wes Ehrecke, president of the Iowa Gaming Association. So far, how would that bill look like and will it pass are questions that will have to wait.

According to an official at the Iowa Department of Administrative Services who spoke before the committee, hundreds of thousands of residents are present in a database and owe some form of debt to the state. That seems to have sparked the attention of some. After he voted against the delay, Democratic Senator Rob Hogg said people who owe state debt or child support should pay up and not have the delay.