Legal online poker in the state of Iowa is a step closer to reality after a senate subcommittee forwarded a intrastate poker bill. Iowa now joins Nevada, California and number of other cash starved states in the high stakes poker race. The bill passed with little opposition and now moves to the full senate for consideration. But there are still a number of hurdles to be cleared before Iowans can participate in unfettered online poker.

Like most U.S. States, Iowa has been hard hit by the recession and that’s clearly the motivating force behind this piece of legislation. According to a study commissioned by the state senate, taxing Iowa online poker revenue at 22 percent could earn the state an additional $13 million annually in tax revenues.

Some Limitations Apply

Iowa already allows limited gaming on riverboat casinos, but online poker would offer up something seriously different for Iowa residents, but there are a few catches. Intrastate gambling, by definition, restricts gaming to Iowa residents and visitors. It also prevents offshore casinos and poker rooms from serving players in the Hawkeye State.

That said, the wording of the legislation does seem to allow for the possibility of interstate poker networks with large, shared pots. Given the number of states considering legalizing poker, and the popularity of interstate lottery pools, this seems like a prudent thought, though no such network currently exists.

Racing to Legalization

The reopening of the U.S. poker market has turned into a race between state and Federal governments to see who will legalize first. Between the peculiarities of election year politics and highly dysfunctional Congress, Federal legislation seems unlikely to happen this year. That means that state governments are in a good position to reap online poker revenues from gaming companies and casinos already operating in their jurisdictions.

For affiliates and gaming companies, operating under a single set of Federal poker laws would be a lot easier than navigating a patchwork of state laws.

The Iowa State Legislature will be considering the bill within the next few weeks.

Will affiliates be better off operating under state or Federal gaming laws? Share your opinion with us on our Gambling Laws and Regulations Forum.

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