Casino gambling down, sports betting up in October

Revenue to the State of Iowa from legalized gambling is taking divergent paths in the new fiscal year. While casino gaming receipts are falling, sports wagering continues to grow.

In October, the state collected $26,741,690 in casino gaming taxes. This is a reduction of $2.3 million from what the state collected in October 2022, when casino gaming tax revenue came in at $29,025.047. For the first four months of Fiscal Year 2024, the state has received $105.2 million in casino gaming taxes. This is a decline of $5.9 million over the same time period in Fiscal Year 2023.

A decline in gaming tax revenue is not unexpected. At its October meeting, the Revenue Estimating Conference projected that gaming tax revenue in Fiscal Year 2024 will come in at $318.5 million. This would be a $24 million decline from the previous year.

For sports wagering taxes, the state received $1,636,357 in October. This is $340,000 higher than what the state collected in October 2022. For the first four months of the fiscal year, sports wagering tax has brought in almost $4.9 million. That amount is $150,000 higher than what the state collected at the start of Fiscal Year 2023.

The continued strong sports wagering tax numbers reflect a business environment different from what Iowa casinos are facing. While Nebraska is in the process of bringing its network of casinos online over the next few years, the state limited sports wagering to placing bets only at the casinos. This decision will mitigate any potential loss of revenue to Iowa in this type of betting. Also, Minnesota continues to have trouble finding a path to legalizing sports wagering.

• Tax fraud prevention efforts see success

Last month the Iowa Department of Revenue filed the annual Tax Gap Compliance Report.

This report is required by Iowa Code and is to detail the cost incurred and paid for services relating to the department’s Tax Gap Compliance Program. The program is described in Iowa Code as an attempt to collect the “tax gap” from non-filers and non-payers of taxes as well as claimants of fraudulent and erroneous refunds.

In fiscal year 2023 the program collected over $104.1 million in gross revenue with individual income tax being the leader (followed by sales tax and corporate income). The program’s cost totaled $32,480,044. This was mostly in paying for salaries, professional services, and OCIO reimbursement. Net revenues transferred to the general fund because of the non-filers and non-payers caught by the program were over $71.7 million.

On the refund reduction side – the fraud prevention team found $48,951,421 in refund reductions. That brings the total collected under the Tax Gap Compliance Program to over $120 million.

Rep. Megan Jones, R-Sioux Rapids, serves parts of Clay and Buena Vista counties in Iowa House District 6.