Iowa‘s online and retail sportsbooks could generate more than $4bn a year in bets once the fledgling industry in the Hawkeye State hits full maturity, according to analysts for PlayIA.com, part of the The PlayUSA.com Network.
As of tomorrow – August 15 – when a number of physical and online sportsbooks are scheduled to launch, Iowa will become the 11th state to actively accept legal sports bets, officially opening the door to an industry that will eventually inject millions of dollars into state coffers.
“Once the Iowa market reaches maturity, its potential is on par with what Nevada is today,” said Dustin Gouker, lead analyst for PlayIA.com. “That means a handle that will exceed $4bn a year, and perhaps approach $5bn. And as we have seen with the success of the early adopters of legal sports betting, such as New Jersey, the state should reap millions in tax revenue.”
PlayIA estimates that it will take Iowa five years or more to reach full maturity and those multi-billion dollar figures, based in part on the handle that Nevada generates with a population that is similar in size to Iowa. It added that should Iowa reach its full potential as a market, operators could generate more than $300m a year in win.
With a tax rate of 6.75%, the state’s coffers would be swelled by $20m annually in tax revenue if the win reaches $300m a year. “We have seen in almost every legal jurisdiction that sports betting can be safely regulated and serve as an economic engine for the state, and Iowa should be no different,” Gouker went on to say.
Less positive for Iowa it is that the opportunity to generate significant revenue and handle will be muted to start. That is almost entirely due to the requirement that online bettors will be required sign up in-person at a physical sportsbook until early 2021, which will initially slow the industry’s growth.
“The requirement of in-person sign-ups until early 2021 will mean Iowa will not capture all of the market at the start,” Gouker said. “But once that requirement sunsets, Iowa sports betting should really take off.”