Iowa Regulators Fine Tipico $20,000, Assess Timeline For Potential 20th Casino

July 10, 2024
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The Iowa Racing and Gaming Commission plans to hold a meeting on Friday to set a timeline for dealing with any applications for a new casino license, a process that has been on hold during the state’s two-year licensing moratorium that recently expired.
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The Iowa Racing and Gaming Commission (IRGC) plans to hold a meeting Friday (July 12) to set a timeline for dealing with any applications for a new casino license, a process that has been on hold during the state’s two-year licensing moratorium that recently expired.

“We intend to file an application before this commission for a gaming license for Linn County,” Doug Gross, an attorney with Brown Winick in Des Moines, told the commission on behalf of the Cedar Rapids Development Group and the Linn County Gaming Association.

“We will file the application this month,” Gross said. “We just wanted to … notify the commission that we intend to do that and would be very appreciative of your consideration of that application when it arrives.”

The five-member commission discussed the issue of a 20th Iowa casino license at a regular month meeting on Monday.

That discussion followed the expiry of a two-year moratorium on June 30 after lawmakers failed to extend the pause prior to the legislative session adjourning in April.

The moratorium halted Linn County’s third attempt to gain a license for a casino project in the city of Cedar Rapids, as the IRGC in 2022 had decided to take applications for a Linn County license when the pause took effect.

Regulators decided to consider the application after Linn County voters in 2013 and 2021 passed local referendums authorizing gaming in two consecutive votes.

As the county has held two successful votes, commission administrator Tina Eick said the measure will not need to come before voters again under state law.

In terms of a licensing timeline, Eick said that process typically takes six to nine months.

Iowa gaming regulators previously denied a gaming license for Cedar Rapids in both 2014 and 2017, citing concerns of market saturation. Peninsula Pacific Entertainment (P2E) and the nonprofit Linn County Gaming Association will apply for the gaming license to build the $250m casino.

P2E has already developed casinos in Dubuque and Sioux City. It is unknown if other developers will submit a proposal.

Currently, Iowa has 19 licensed casinos, as well as a state lottery, charitable gaming, and retail and mobile sports betting.

State gaming regulators are also required to commission a market study on how a Cedar Rapids casino would affect Linn County and Iowa’s gaming industry. Daryl Olson, chair of the IRGC, directed commission staff to create an RFP for the study.

The commission, Olson said, needs to do “everything in a timeline that makes a lot of sense, but we don’t rush things, or drag it out”.

Tipico Fined $20,000 For Unauthorized Wagers

Prior to completing its planned exit from the Iowa market, Tipico Iowa LLC, a subsidiary of Tipico Group, has been fined $20,000 to settle a two-count complaint over unauthorized wagers.

During Monday's meeting, Eick noted that commission staff completed a compliance check of all licensees with regard to bet types offered for Super Bowl 57 but did not find any violations by Tipico’s sportsbook.

However, on February 14, 2023, Tipico reported to the commission that it had accepted five wagers on prop bets involving interceptions thrown by the starting quarterbacks in the Super Bowl, which was not listed as an approved wager. The wagers totaled $285 and all were losing bets.

Tipico voided the wagers, and the customers received their money back. The IRGC determined that mistake would incur a penalty of $5,000.

As for count two of the complaint, Eick explained that, on March 25, 2024, Tipico offered four prop bets involving total for points, rebounds and three-point baskets for University of Iowa women’s basketball player Caitlin Clark during the NCAA tournament. Six wagers were placed by four patrons totaling $375.

“This is an impermissible market in Iowa,” Eick said, citing prohibitions on proposition wagers involving in-state collegiate athletes. “Upon discovery Tipico reported to commission staff that it had accepted six successful wagers and allowed [winning wagers] to be maintained by the patrons and the patrons with losing wagers received their money back.”

The commission approved a $15,000 fine to settle count 2. Brian Schroeder, vice president for compliance and legal at Tipico, acknowledged the violations before updating the commission on Tipico's exit from the U.S. market.

Tipico is winding down its U.S. operations after MGM Resorts International’s subsidiary LeoVegas agreed to acquire the company’s U.S. internet gaming and sports-betting operations. As part of the deal, LeoVegas will acquire Tipico’s U.S.-facing management, technology and trading teams across the U.S., Colombia and Europe.

“At this point, Tipico has no outstanding users in Iowa,” Schroeder said. “We just have customer accounts that we need to get the customers back their money in the withdrawal process.”

Tipico, which is owned by the private equity firm CVC Capital, is also shutting down its sports-betting operations in Colorado, New Jersey and Ohio. 

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