Iowa legislative panel postpones collecting debt from sports betting winnings

The Iowa Administrative Rules Review Committee approved a request by some casinos in the state to put off a portion of the new rules that would authorize the state to collect some winnings of gamblers who owe child support, back taxes or criminal debt.

The delay would allow lawmakers to draft a bill next year that clarifies how they want debts collected against sports gambling winnings, Des Moines Register reports.

"Iowa is one of just three states planning to scoop up a sports gambler's winnings to pay child support or state debt," said Brian Ohorilko, the Iowa Racing, and Gaming administrator. Indiana and Maine have not yet gone live with sports betting. Iowa sports gamblers can begin placing bets at noon Thursday.

The rules regulating sports betting in Iowa authorized casinos to ask for the Social Security numbers of sports gamblers once they win $1,200 and allow casinos to check the names of those winners against a database of people delinquent on child support, criminal fines or taxes.

The $1,200 amount is the federal threshold at which slot machine players must report their winnings for tax purposes and Iowa has, for the last decade, checked the database to see if slot winners owed money.

“The state of Iowa has recouped $34 million in owed debt from slot winnings,” said Wes Ehrecke, president of the Iowa Gaming Association, the trade group representing the state's 19 commercial casinos.

Federal guidelines, however, do not require casinos to ask for the Social Security number of a sports bettor unless they've won $600 or more, if the amount is at least 300 times the wager.

“Iowa's rules could have put casino operators in the awkward position of asking for a sport bettor's Social Security number when the winner didn't legally have to disclose it,” Ehrecke said. “Casinos will propose a bill in 2020 that aligns the amounts with federal tax requirements and will likely add table games, such as blackjack and roulette, so debts could be collected on more gambling earnings.”

"Come next session we'll bring forth a bill hopefully that will have bipartisan support for to clarify that to the federal guidelines," he added said.

An official at the Iowa Department of Administrative Services told the committee hundreds of thousands of residents are listed on a database owing some form of debt to the state.

Democratic Sen. Rob Hogg voted against the delay, saying people who owe child support or other state debt should pay up without the delay.

"I'm going to vote on the side of the children not getting the support they're owed," Hogg said. "You could have a deadbeat dad who makes 10,000 bucks on sports gambling and continues to be a deadbeat dad and that's wrong."