DES MOINES --- Legalizing online poker at state-licensed casinos likely would clear the way for Native American casinos to offer an even broader range of Internet wagering to Iowans, a key state regulator told legislators Tuesday.
Jack Ketterer, administrator of the Iowa Racing and Gaming Commission, said federal law broadly allows Native American tribes as sovereign nations to provide whatever gambling is authorized by the laws of the states in which they reside.
"I think it would be difficult to assume that we could prevent the tribes from doing anything other than wagering on sports, which is prohibited by federal law," Ketterer told an informal meeting of senators discussing provisions of a gambling package that could see debate in the Iowa Senate as early as Thursday.
"I would lean toward they could probably do whatever they want. I wouldn't hang my hat on that you could prohibit the tribes from providing any gambling that they would like," Ketterer said.
Tuesday's discussion was somewhat theoretical, given that the Senate Ways and Means Committee last week removed a section of the bill that sought to legalize intrastate or intranet poker through a state-regulated hub operator connecting participating state-licensed casinos.
Senators replaced the language with a directive for the state commission to study the scope of online poker being offered illegally to Iowans and to report back to them how best to regulate the activity if they consider legalization next session.
Sen. Jeff Danielson, D-Waterloo, the bill's floor manager, said federal indictments issued last week to shut down three Internet poker web sites operating illegally indicated that bringing the activity under tight regulation was "a topic worthy of public debate." Backers of legalizing online poker within Iowa estimate that up to 150,000 Iowans currently play unregulated online poker via Internet sites offered illegally by off-shore or foreign operations.
Senators have reworked the original legislation into a commission report on online poker in hopes of salvaging provisions that would end the requirement that existing state-licensed casinos periodically conduct countywide referendum votes and a separate section that seeks to resolve a dispute over purse money among the state's various horse breeders and the Altoona racetrack-casino.
Originally, a key feature of the bill would have authorized the creation of an intrastate online poker network and provided a regulatory structure for its implementation, operation and taxation. Instead, the Racing and Gaming Commission would be directed to conduct fact-finding regarding the framework for state regulation of a system under which a hub operator would contract with state-licensed casinos to operate affiliated online sites within a "closed loop" in Iowa for registered players ages 21 and older.
On Tuesday, senators directed Ketterer to include in the report the potential impact that legalizing online poker could have at the three Iowa casinos currently operating on Native American land without state regulation.
Danielson said he has had discussions with the lobbyist who represents the Sac and Fox tribe that operates the Meskwaki casino in Tama County regarding the gambling legislation. He said the discussions have been "cooperative, not adversarial."
As the bill's floor manager, Danielson said he would resist attempts to amend the measure to address efforts by dog track operators in Council Bluffs to end greyhound racing at that facility or to add Gov. Terry Branstad's proposal to increase the state tax on state-licensed casinos to 36 percent as a way to generate revenue to cut the state corporate income tax rate in half.
Under Branstad's graduated approach, riverboat casinos that currently pay 22 percent tax rates and racetrack-casinos that pay 24 percent tax rates would pay 24 percent on their first $25 million in gaming revenues, 30 percent on the next $50 million and 36 percent on gaming revenue above $75 million.