The Iowa Racing and Gaming Commission split votes on two eSports agenda items at its Thursday meeting, approving it for fantasy sports contests wagering but not for sports betting.
The split in the two votes largely came down to wording in the state’s rules for sports betting. DraftKings made the request for approval for eSports as a contest, which the IRGC approved unanimously.
The Iowa Gaming Commission, which was backed by DraftKings, followed with the request for approval for eSports as a wager, but there was no motion brought after queries from commission members that included Iowa Assistant Attorney General Jeff Peterzalek. With the Iowa state legislature currently in session for what is expected to be at least two weeks to work on the state budget, there may still be an opportunity to revisit eSports for sports wagering via a change in the statute.
What is expressly allowed and what is not
Chris Cipolla, senior manager for government affairs for DraftKings, made the pitch for eSports as a permissible sport on which fantasy sports contests may be offered, with the request pursuant to Rule 491, 14.9(1). He noted Iowa “is currently the only state in the nation that does not allow any form of paid eSports fantasy sports contests” among states where fantasy sports are offered.
IRGC Chairwoman Kristine Kramer inquired to Peterzalek whether “this could be allowed under the Iowa law,” and the assistant AG answered in the affirmative, specifying that “under Chapter 99E it is expressly allowed that simulated games or contests can fit within the definition of fantasy sports contests” and noted the commission had the discretion to allow it or disallow it.
After unanimous approval, Iowa Gaming Association President and CEO Wes Ehrecke presented the case for eSports for sports wagering purposes under Rule 491, 13.3(1) while citing Chapter 99F. He said both the legislature and the IRGC “established that an authorized sporting event, a professional sporting event, a collegiate sporting event, an international sporting event — and we believe that eSports clearly fits well in this category for casino sports books to offer wagering options on these events.”
Ehrecke added eSports has sanctioned governing bodies at both the pro and collegiate levels, professional players receive lucrative contracts and colleges offering scholarships as part of a varsity sport. He also framed approval as a “fairness issue, to participate with a sanctioned, well-regulated industry.”
Cipolla followed up noting DraftKings views eSports as “athletic events,” with players who participate possessing “elite physical talent and skills, similar to the specialized ability necessary to participate in sports such as baseball, golf, soccer, and tennis. All are categories of which the commission has pre-approved as permissible sporting events on which wagering may be offered.”
Cipolla pointed out that “eSports are not expressly prohibited in the relevant statute in 99F” while noting the legislature did choose to exclude other wagering categories. He also said other states, including West Virginia and Colorado, have added eSports among their offerings.
Chairwoman Kramer again queried Peterzalek whether betting on eSports as a sporting event could be allowed under state law, and the Iowa assistant attorney general said it would not under 99F, pointing out that “words matter” before explaining his opinion.
“The words in 99E are substantially different in 99E than the words in 99F. And you need to keep in mind what we just approved in the prior agenda item wasn’t because eSports weren’t a sport or an authorized sporting event, it was because they were a simulated game or contest which is expressly allowed under 99E. There is no such language in 99F.
“Now having said that I think that it’s important to look at Iowa’s statutory scheme in whole, and the way Iowa’s laws are set up is that all gambling in Iowa is illegal unless it’s expressly authorized by law. That’s the very reason we have Chapter 99E that allows internet fantasy sports contests. … Under 99F, this scheme is not expressly authorized, it does not meet the definition of authorized sporting event.”
Peterzalek went further to say the definition of “authorized sporting event expressly excludes fantasy sports as defined in Chapter 99E and doesn’t meet the other definition of professional sporting event, international sporting events or any of the other definitions needed to fit within 99F.”
After back and forth from both sides that included Cipolla expressing the position the commission could answer the question of eSports being a sport, Kramer asked if there was a motion, but there was no reply from the fellow commissioners.
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