Amid a series of scandals that involved underage collegiate athletes using proxy accounts to wager on sports, sometimes on their own team, Iowa gaming regulators are looking to enact new regulations to force operators to remain more vigilant.
The Iowa Racing and Gaming Commission (IRGC) put forth a notice of intended action last week to amend the state’s sports-betting regulations.
At least 15 athletes from either the University of Iowa or Iowa State University have been criminally charged this month with a misdemeanor count of tampering with records for using accounts registered in another person’s names, in many cases a parent, to wager on sports.
All of the arrests are the result of an investigation from the Iowa Division of Criminal Investigation.
The IRGC has remained fairly quiet on the ongoing process, referring only to a statement issued earlier this month that it had no information indicating that the integrity of any event at either university should be called into question.
However, the new rules are clearly designed to address some of the issues raised during the criminal investigation.
First, the new rules would require operators to prominently display a message that account-sharing is prohibited, persons under the age of 21 are prohibited from wagering, and that no person shall either circumvent account set-up procedures or assist in the placement of a wager by anyone under 21.
The rules would also require multi-factor authentication every seven days to access an account and require operators to utilize location detection to monitor geolocation activity to detect suspicious activity.
Some of the criminal complaints indicated that law enforcement identified athletes using alternate accounts based on location data, such as student dormitories or buildings only accessible by athletes.
In addition, the updated regulations will prohibit funding a sports wagering account from the financial account of an individual under age 21 and require operators to verify a financial account to ensure that the registered bettor is also an authorized user of the financial account.
Brian Ohorilko, administrator of the Iowa Racing and Gaming Commission, said the new rules come during a period of the year when the commission typically looks to update its regulations.
“This industry has evolved every year, it changes daily in terms of the types of resources that are available for those sportsbooks,” he told VIXIO GamblingCompliance.
Ohorilko added that as the industry evolves, the bar continues to be raised on what would constitute acceptable standards for know your customer (KYC) verification and financial protections, among other issues.
“What tends to happen is as these industries involve a number of service providers that can provide additional controls and resources, and then those are evaluated by the different states and regulators to determine the effectiveness, then you see these enhancements that are typically proposed in each state,” he said.
Ohorilko said the rulemaking process typically takes about four to six months from the notice stage to enactment, with multiple public hearings and legislative approval along the way.
He added that additional rules regarding casino gaming and pari-mutuel wagering will likely be released next month.
Several more Iowa college athletes have not been charged with crimes but have been suspended by the National Collegiate Athletic Association for placing bets either on their own sport or on other sports involving their university.
One is Iowa football player Noah Shannon, who received a one-year suspension.
Shannon’s football coach, Kirk Ferentz, said Shannon placed a bet on an Iowa team in a different sport, but had not committed any crime and expressed frustration that the Iowa schools were the only ones bearing the brunt of such an investigation.
“I still find it highly unusual, interesting that there’s two schools affected in the whole country on this topic, and I can’t imagine these are the only two universities that have students gambling,” Ferentz said.
“My guess is you could probably fill [69,000-seat] Kinnick Stadium with all the student-athletes or students that have gambled,” he added.