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Iowa lawmakers are moving forward with a bill to clarify in state law that sharing sports-betting accounts with other gamblers or proxy betting is illegal, giving law enforcement clearer authority to investigate those practices.
Senate Study Bill 1097, a bill proposed by the Iowa Department of Public Safety, was approved last week by the Senate Judiciary Committee and renumbered Senate File 395. The committee voted 17-1 to approve the bill.
Currently, Iowa’s administrative sports-betting regulations say that both account sharing and proxy betting are not permitted.
But neither is explicitly illegal in state law and because of that law enforcement officials believe there is no mechanism to charge gamblers who may have violated the state’s existing gaming regulations.
SF 395 sets out account sharing as “entering into or participating in an agreement between two or more persons to, either temporarily or permanently, share access to a person’s account with the purpose of concealing a person’s identity”.
The measure also defines proxy betting as “any wagering or betting activity, including a request of another to engage in wagering or betting activity, involving two or more persons, where one person places a wager on behalf of another person with the intent to hide or conceal the bettor’s identity”.
“This bill comes before us from the Department of Public Safety where sports betting was passed a few years ago,” said Republican Senator Dan Dawson during a Judiciary Committee hearing on Wednesday (February 19).
“The Iowa Racing and Gaming Commission passed administrative rules … which limits the use of account sharing and proxy betting,” Dawson said. “This bill makes these two things a specific crime as opposed to administrative restrictions.”
SF 395 criminalizes the delivery of “anything of value to place as a wager in a parimutuel pool or other authorized system of wagering after receiving that thing of value, for a fee, outside of a gambling structure”.
Under SF 395, “any person guilty of illegal gaming commits an offense ranging from a serious misdemeanor to a Class C felony based on the sum money or value of the property involved and whether the offense was a first or repeat offense”.
Violators face a minimum fine of $430 and up to one year in confinement for serious misdemeanors related to account sharing and proxy betting. In Iowa, a Class C felony is punishable by prison for up to ten years and a fine of between $1,370 and $13,660.
“I think Senator Dawson and I will probably agree to disagree that we just have a different thought process on punishment for online gaming,” said Democratic Senator Janet Petersen, the only lawmaker to vote against SF 395. “I think the punishment outlined in this legislation is very steep and does not fit the crime.”
Petersen said she would prefer to see more “front-end safeguards that prevent proxy betting and these types of behaviors from happening”.
Iowa sports-betting operators such as DraftKings and FanDuel already prohibit wagering using someone else’s account.
“The bill does nothing to go after those companies, quite frankly, that are advertising to your Iowans,” Petersen said. “I know we are talking about people over the age of 18 but to me they are still kids. I do think these penalties are very steep.”
Dawson agreed that gaming operators should be responsible for safeguarding both minors and addicts who are banned from casinos, as well as preventing play from people who are trying to hide their identity.
“I would like to reaffirm for the committee on the penalties,” Dawson said. “What this does is simply couples with what is already in code. It does not create any new additional penalties.”
The legislative push to criminalize proxy betting and account sharing comes as a federal lawsuit filed by 26 athletes against three Division of Criminal Investigation (DCI) employees is still pending. More than two dozen student-athletes at the University of Iowa and Iowa State University were investigated by the state for illegal sports betting in 2023.
The Associated Press reported that most of the athletes paid fines after entering guilty pleas to underage gambling in exchange for having identity theft charges dismissed.
In March 2024, prosecutors in Story County dropped charges against Iowa State student-athletes because prosecutors believed state investigators exceeded the permitted use of geofencing technology in their investigation.
One month later, 26 student-athletes sued the DCI alleging their constitutional rights were violated by the investigation because it occurred without a warrant.
