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Iowa is one of the states that currently offers casino gambling as well as legal sports betting. Iowa is currently offering casino gambling through 19 offline casinos, as well as legal retail and online betting on sports. The tax rate applied to sports betting is set at 6.75% on sports betting revenue, and casinos that generate at least $3 million in total revenue impose a 22% tax rate on total gambling revenue.

As competition with casinos in neighboring states intensifies, Iowa lawmakers are seeking to gradually reduce the tax rates applied to land-based casinos. One such effort is being led by Representative Jane Bloomingdale, who introduced House Research Bill 719 earlier this month. The proposal calls for slightly lower tax rates for casino operators.

Under House Research Bill 719, the 22% tax rate on land-based casinos would be reduced by a percentage point in each fiscal year. Under the proposed legislation, the process would continue until fiscal 2027, when the tax rate on retail casinos would be reduced to 19% for gross gaming income. The aforementioned proposal comes at a time when the governor expects a tax cut on Iowa residents' income.

Ultimately, a small reduction in the tax on casinos wants to make casinos more competitive amid growing competition from neighboring states. For example, nearby casinos in Illinois and Nebraska have an advantage over Iowa and can attract visitors by considering lower tax rates.

Casino Provides Vitality to Communities
Bloomingdale, which was recently cited by the Iowa Capital Dispatch, said casinos across Iowa are helping communities. She said these stimulus checks have been helpful by providing critical resources. "Every fire station has a new fire truck, every church has a new roof, and every cemetery has a fixed headstone. So I think when they (casinos) look at what they've done in our community, and if they had an extra 1 percent income, the money would go straight into our community," Bloomingdale added.

Also speaking about the importance of tax cuts, she acknowledged that lawmakers are considering lower taxes on businesses and individuals, but not casinos. Bloomingdale added, "It just doesn't seem fair," noting that Iowa should "look at everybody" if it considers lowering taxes

Bloomingdale's proposal gained traction Monday by winning approval from the House Ways and Means Committee.