Bill Summary – FastDemocracy

Fiscal Note
                                              Fiscal Services Division
HF 2286 – Sports Wagering Receipts Fund (LSB5831HV)
Staff Contact: Maria Wagenhofer (515.281.5270) maria.wagenhofer@legis.iowa.gov
Fiscal Note Version – New
Description
House File 2286 directs all State tax revenue collected from Internet fantasy sports and sports
wagering to be deposited into the County Endowment Fund instead of the Sports Wagering
Receipts Fund. For FY 2023, the Bill appropriates all unobligated and unencumbered moneys
in the Sports Wagering Receipts Fund from the previous fiscal year to the County Endowment
Fund. The Bill repeals the Sports Wagering Receipts Fund on June 30, 2023.
Background
The Sports Wagering Receipts Fund was established in FY 2020 by passage of 2019 Iowa
Acts, chapter 132 (Sports Wagering and Fantasy Sports Act), which authorized sports wagering
and fantasy sports contests in the State. The Fund receives sports wagering taxes and Internet
fantasy sports taxes. Table 1 includes the FY 2020, FY 2021, and FY 2022 year-to-date
revenue and appropriations from the Sports Wagering Receipts Fund.
Table0216
Fund: 1–    Sports Wagering Receipts Fund
                                              FY 2020           FY 2021           FY 2022*
Revenue
Beginning Account Balance                 $             0   $     1,499,735   $     5,846,701
Pari-Mutuel Receipts                            1,788,241         6,091,872         5,898,810
Interest                                           11,494             5,094             4,578
Total Revenues                            $     1,799,735   $     7,596,701   $    11,750,089
Appropriations
Sports Tourism Program                    $            0    $             0   $     1,500,000
Gambling Treatment Program                       300,000          1,750,000         1,750,000
Total Appropriations                      $      300,000    $     1,750,000   $     3,250,000
Reversion                                               0                 0                  0
Ending Balance                            $     1,499,735   $     5,846,701   $     8,500,089
* Year-to-date as of February 18, 2022.
The Gambling Treatment Program is administered under the Department of Public Health and
the Sports Tourism Program is administered under the Iowa Economic Development Authority.
Status quo appropriations for these programs from the Sports Wagering Receipts Fund were
included in the Governor’s recommendations for FY 2023.
The County Endowment Fund is administered under Iowa Code section 15E.311, and the
purpose of the Fund is to enhance the quality of life for citizens of Iowa by providing moneys to
new or existing citizen groups organized to establish county affiliate funds or community
foundations that will address countywide needs. The proceeds of this Fund are distributed
equally to counties that do not have a licensed casino for funding charitable organizations. Iowa
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Code section 99F.11 allocates an amount equal to 0.8% of the Adjusted Gross Revenue tax
from gambling games at Iowa casinos to this Fund.
Assumptions
• The balance in the Sports Wagering Receipts Fund at the beginning of FY 2022 was
   approximately $5.8 million, which was brought forward from the previous fiscal year.
• It is estimated that State tax receipts from sports wagering for the second half of FY 2022
   will match the revenue (approximately $4.9 million) collected for the first six months of the
   year, totaling approximately $9.9 million in sports wagering tax revenue for FY 2022.
• There will be approximately $3.3 million appropriated from the Sports Wagering Receipts
   Fund in FY 2022.
• When accounting for the FY 2022 appropriations, it is estimated the Sports Wagering
   Receipts Fund will have a balance of approximately $12.5 million at the beginning of
   FY 2023.
• Annual sports wagering tax receipts will likely exceed the $6.1 million collected in FY 2021.
Fiscal Impact
The fiscal impact of appropriating all unobligated and unencumbered moneys in the Sports
Wagering Receipts Fund in FY 2023 to the County Endowment Fund is estimated to result in a
one-time increase of approximately $12.5 million to the County Endowment Fund in FY 2023.
This is in addition to the FY 2023 State tax revenue from sports wagering and Internet fantasy
sports. At this time, the ongoing annual tax revenue to the County Endowment Fund from
sports wagering and Internet fantasy sports is difficult to estimate. This is due in part to the
novelty of sports wagering in the State, combined with the impact of the COVID-19 pandemic on
the market. However, due to the increase in sports wagering tax receipts in FY 2022 to-date
when compared to FY 2021, it is estimated that new funding to the County Endowment Fund
from sports wagering and Internet fantasy sports will likely exceed $6.1 million annually.
The repeal of the Sports Wagering Receipts Fund may require the General Assembly to identify
another funding source for the Gambling Treatment Program and the Sports Tourism Program
to maintain the current levels of funding being appropriated to these programs.
Sources
Integrated Information for Iowa (I/3)
LSA Calculations
                                                                        /s/ Holly M. Lyons
                                                                        February 22, 2022
Doc ID 1286819
The fiscal note for this Bill was prepared pursuant to Joint Rule 17 and the Iowa Code. Data used in
developing this fiscal note is available from the Fiscal Services Division of the Legislative Services
Agency upon request.
                                            www.legis.iowa.gov
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Statutes affected: 
Introduced: 8.57, 15E.311