HSB757 amends Iowa Code section 99D.11(6)(c) to broaden who the state Racing and Gaming Commission may authorize to conduct advance deposit wagering (ADW). Instead of naming the Polk County horse racetrack licensee as the authorized party, the bill allows an entity licensed under section 99D.9D (alternative simulcasting licensure for horse and dog races) to obtain ADW authorization and operator licensure if it meets other statutory conditions.
The bill preserves the existing revenue allocation: of net ADW revenue (after taxes and ADW-specific expenses), 50% is designated for horse purses under section 99D.7(5) and 50% is designated for the Polk County pari‑mutuel horse racetrack licensee. The change expands the potential pool of ADW operators while locking in funding for purses and the Polk licensee, creating new commercial and regulatory friction points for prospective operators and the Commission alike.
At a Glance
What It Does
Replaces a named Polk County racetrack authorization with authorization for entities licensed under Code section 99D.9D to conduct advance deposit wagering, and preserves a 50/50 split of net ADW revenue between purses (99D.7(5)) and the Polk County racetrack licensee. The commission may also issue ADW operator licenses to applicants who comply with subparagraph (3) and section 99D.8A.
Who It Affects
Entities holding 99D.9D simulcasting licenses and prospective ADW operators, the Polk County pari‑mutuel racetrack licensee, horse owners and purses, and the state Racing and Gaming Commission (oversight and licensing).
Why It Matters
It opens ADW operation to a broader class of simulcasting licensees while guaranteeing a revenue stream to the Polk racetrack and purse pools—altering commercial incentives for market entry, negotiating leverage over licensing agreements, and how ADW revenue is audited and distributed.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
HSB757 rewrites the portion of Iowa’s ADW law that tied authorization explicitly to the Polk County horse racetrack licensee and instead refers to any entity licensed under Code section 99D.9D. That statutory cross‑reference is significant: 99D.9D covers alternative simulcasting licensure for horse and dog races, so the bill reaches a broader set of licensees than the single named racetrack.
The commission retains its authority to issue an advance deposit wagering operator license, but only to applicants that satisfy the other statutory conditions already in place (subparagraph (3) and section 99D.8A).
The bill keeps the technical definition of advance deposit wagering: individuals open accounts, deposit funds, and use the account balance to place pari‑mutuel wagers, either in person at a licensed racetrack enclosure or remotely via telephone or electronic means. For accounting, the statute requires that net ADW revenue—calculated after all taxes and expenses directly related to account deposit wagering incurred by the licensed operator—be split so that half funds purses created under section 99D.7(5) and half goes to the Polk County pari‑mutuel horse racetrack licensee.
That allocation applies to revenue “received through advance deposit wagering,” so it follows the operator’s reported ADW receipts reduced by the specified deductions.Practically, the change lets simulcasting licensees outside Polk County pursue ADW authorization and operate deposit wagering platforms, but they enter the market subject to a statutory revenue-share with an external beneficiary (the Polk licensee) and the licensing standards in 99D.8A and subparagraph (3). The bill therefore expands the eligible operator pool while embedding a durable payment obligation to the Polk racetrack and a statutory priority for purse funding, which operators and the Commission will need to operationalize in contracts, reporting, and audits.
The Five Things You Need to Know
The bill replaces a named authorization for the Polk County horse racetrack licensee with authorization for any entity licensed under Iowa Code section 99D.9D to conduct advance deposit wagering.
The commission may issue an advance deposit wagering operator license only to applicants that comply with the bill’s referenced conditions (subparagraph (3) and section 99D.8A).
Advance deposit wagering is defined to permit account-based pari‑mutuel wagering placed in person at a licensed racetrack enclosure or remotely via telephone or electronic means.
Net ADW revenue—after taxes and expenses directly related to account deposit wagering incurred by the operator—must be split 50% to horse purses under section 99D.7(5) and 50% to the Polk County pari‑mutuel horse racetrack licensee.
Before granting an ADW operator license the Commission must obtain an agreement with the Polk County racetrack licensee (the bill’s explanatory language confirms an agreement is required even though the statute’s named authorization was removed).
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Who may be authorized to conduct ADW
This subsection swaps the statutory text that named the Polk County racetrack licensee with a cross‑reference to entities licensed under 99D.9D. Mechanically, that expands the class of potential ADW authorizables to include holders of alternative simulcasting licenses (horse and dog). The practical upshot is that the Commission’s authorization power is now exercisable over a category of licensees rather than a single named licensee, so application and eligibility reviews will follow the standards applicable to 99D.9D licensees.
ADW operator license conditions remain in place
The amendment preserves the Commission’s discretion to issue an advance deposit wagering operator license, but only to entities that comply with existing statutory prerequisites—specifically subparagraph (3) and section 99D.8A. Those cross‑references will continue to impose whatever background checks, technical standards, or contractual requirements that 99D.8A and subparagraph (3) contain, meaning a 99D.9D license is necessary but not sufficient for operation.
Definition of ADW and permitted channels
The bill retains the statutory definition of advance deposit wagering as an account-based pari‑mutuel product and keeps explicit authorization for bets placed in person at a licensed racetrack enclosure or remotely via telephone or electronic means. This preserves the operational flexibility for ADW platforms and clarifies the covered transmission modes for regulatory and audit purposes.
Net revenue split and deduction basis
The statute requires that net ADW revenue—calculated "less all taxes paid and expenses directly related to account deposit wagering incurred by" the operator—be split 50% to purses under 99D.7(5) and 50% to the Polk County racetrack licensee. That creates a statutory priority for purse funding and a guaranteed payment stream to the Polk licensee regardless of which 99D.9D entity operates the ADW platform, and it anchors the basis for financial reconciliations and audits.
This bill is one of many.
Codify tracks hundreds of bills on Economy across all five countries.
Explore Economy in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Entities licensed under 99D.9D — gain explicit eligibility to seek ADW authorization and operator licensure, opening ADW as a revenue stream beyond the formerly named Polk licensee.
- Polk County pari‑mutuel horse racetrack licensee — secures a statutory entitlement to 50% of net ADW revenue and leverage in licensing agreements, preserving a major revenue source even if others operate ADW platforms.
- Horse owners and trainers (purse recipients) — benefit from a dedicated funding stream (50% of net ADW revenue) routed to purses under section 99D.7(5), stabilizing purse pools for racing events.
- Prospective ADW technology and service providers — gain a larger addressable market if more 99D.9D licensees pursue ADW, increasing demand for platform, compliance, and payment services.
- State Racing and Gaming Commission — gains clearer statutory authority to license a broader class of operators and to enforce revenue allocation rules, strengthening administrative control over ADW growth.
Who Bears the Cost
- New ADW operators (99D.9D licensees) — must remit half their net ADW revenue to the Polk licensee and cover all ADW-specific expenses before that split, which reduces margins and may deter entry or raise consumer fees.
- Non‑Polk licensees negotiating ADW agreements — face bargaining pressure from the Polk licensee, which can extract higher fees or negotiating concessions because of its guaranteed statutory share or because an agreement is required before licensure.
- The Racing and Gaming Commission — faces increased administrative burdens to verify net revenue calculations, monitor deductible expenses, and enforce distribution rules, potentially without matched appropriations.
- Smaller racetrack licensees not covered by 99D.9D — may face competitive pressure if larger simulcasting licensees enter ADW and consolidate customers, while still not getting direct revenue from ADW under the statutory allocation.
Key Issues
The Core Tension
The bill pits two legitimate policy goals against each other: expanding ADW participation and competition by opening authorization to 99D.9D licensees, versus preserving a protected revenue stream for the Polk County racetrack and purse funding. Opening the market promotes innovation and choice; locking in a 50% statutory payment protects existing stakeholders but risks creating entry costs and bargaining power that can negate the competitive benefits.
The bill combines market opening with a legally protected revenue stream for a single racetrack licensee, which produces an internal inconsistency in incentives. By allowing any 99D.9D licensee to operate ADW while mandating that half of net ADW revenue go to the Polk County licensee, the statute gives the Polk licensee disproportionate leverage over potential entrants: operators must either accept the 50% statutory transfer or negotiate an agreement with the Polk licensee before licensure.
That dynamic may raise the effective cost of entry, blunt competitive pressure, and encourage contractual arrangements that shift other costs or obligations onto the operator.
Implementation will require careful drafting of audit, accounting, and dispute‑resolution procedures. The phrase "less all taxes paid and expenses directly related to account deposit wagering incurred by the" operator creates room for disagreement over which expenses qualify as "directly related." Operators and the Commission will need clear rules or administrative guidance on allocable overhead, platform fees, transaction costs, and cross‑platform expense sharing.
The bill also depends on cross‑references (99D.9D, 99D.8A, and subparagraph (3)) for eligibility and technical standards; those provisions determine the practical regulatory hygiene for ADW platforms but are not restated here, so the Commission must integrate them into licensing checklists and enforcement plans.
Finally, there is a drafting ambiguity between removing a named authorization and retaining a statutory obligation to obtain the Polk licensee’s agreement prior to issuing a license (referred to in the bill’s explanatory text). If the statute does not explicitly state that an agreement is required, litigants may argue over whether the explanatory language reflects legislative intent.
That ambiguity could delay licensure, prompt litigation, or require clarifying amendments.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.