Could legalizing sports wagering in Iowa hurt its NCAA Tournament hosting future?
Catch Des Moines CEO Greg Edwards describes the reception the NCAA Tournament received in Des Moines in 2016.
Editor's note — This story was originally published in March. It has been updated to reflect that the Supreme Court ruled on sports wagering.
Jake Highfill doesn’t claim to be the biggest sports fan on the planet. He says he’s never placed a bet — legal or illegal. But the Iowa Republican knows the NCAA’s stance on sports betting.
And he’s not buying it.
“The NCAA is full of themselves,” Highfill, a state representative from Johnston, recently told The Des Moines Register. “As far as the NCAA policy saying (there can be) no events in states with legal wagering — I think they’re full of it."
In a decision that could have far-reaching impact, the U.S. Supreme Court ruled Monday that a 25-year-old federal law that has effectively prohibited sports betting outside Nevada cannot block states that want to set up sports books.
Why does this matter in Iowa?
Well, because of an NCAA policy related to tournament site selection: “No predetermined session of an NCAA championship may be conducted in a state with legal wagering that is based on single-game betting or the outcome of any event (i.e. high school, college or professional) in a sport in which the NCAA conducts a championship. This policy currently excludes the state of Nevada.”
Des Moines is a first-and-second round site host for the 2019 NCAA men's basketball tournament, and that event is not expected to be affected if betting laws change in Iowa. But in order for Des Moines, or any other location in Iowa, to host NCAA championship events beyond next year's, either the state's sports betting supporters or the NCAA would have to blink.
Greg Edwards, president of the Greater Des Moines Visitors and Convention Bureau, knows the conflict. Adoption of legal sports wagering in Iowa could cost Des Moines and other cities millions of dollars in revenue that fans pump into host cities. Fans fill hotels. They frequent local bars and restaurants. They shop at malls. People of all ages partake in weekend-long downtown festivities.
“It’d be a devastating blow,” said Edwards, who has helped organize Des Moines’ previous NCAA Tournament bids. “There’s a lot of cool things that we bring in, but the NCAA men’s tournament is way at the top of the list. Everybody knows about it. Everybody follows it."
The NCAA declined to speak at length with the Register about the issue. “We do not have a comment to share at this time,” Stacey Osburn, the NCAA’s director of public and media relations, wrote in an email.
But the NCAA’s long-held stance against sports gambling is explained on its website: “The NCAA opposes all forms of legal and illegal sports wagering, which has the potential to undermine the integrity of sports contests and jeopardizes the welfare of student-athletes and the intercollegiate athletics community.”
In 2016, the last time Des Moines hosted part of the NCAA Tournament, the result was about a $3 million local economy boost, according to the Des Moines convention bureau.
“Could we find other things to make up for that loss?" Edwards said. "We probably could, but losing the NCAA men’s basketball tournament would be a real blow.”
Edwards said the 2016 NCAA weekend at Wells Fargo Arena meant a $2.8 million impact to Des Moines. That tournament included powerhouse programs Kansas, Kentucky, Indiana and Connecticut.
“The economic impact was huge,” Edwards said. “ ... The whole ambiance of downtown Des Moines was great. The whole community embraced it. Bars and restaurants became headquarters for teams. The corporate community — everyone embraced it.”
Meanwhile, proponents of legal sports betting in Iowa point to the financial impact legalizing it could have on state and local economies.
According to published reports, March Madness wagering totaled around $295 million in Las Vegas in 2017. The Strip is an annual gathering place to watch and gamble on the games, starting on Selection Sunday all the way through the Final Four.
On a narrower scale, Prairie Meadows president Gary Palmer said legal sports wagering could mean an additional $8 million to $10 million for the Altoona casino.
“It'd be a good opportunity for us to have people come out for sporting events that we don’t usually have come out now,” Palmer said. “Instead of having just our traditional Kentucky Derby Day, we could have events around March Madness, the Super Bowl and the World Series.”
Advocates of legal sports wagering point to the money it would generate for state and local economies. In 2016, for instance, Iowa’s 19 casinos paid $317 million in taxes and contributed $41 million to nonprofits — beyond other charitable donations.
Julie Stewart, director of community relations for Prairie Meadows, said the Altoona casino put back $40 million into state and local economies in 2017.
Highfill, the Johnston Republican who helped steer the bill through an Iowa House subcommittee this session, believes the state Legislature would pass the bill quickly if the U.S. Supreme Court allows it.
Wes Ehrecke, president of the Iowa Gaming Association, talks about plans to introduce a bill in the Iowa Legislature that would allow Iowans to legally bet on sports events if the U.S. Supreme Court rules favorably in a pending case.
Palmer said Prairie Meadows could implement sports betting soon after.
“We could turn the switch pretty quickly,” Palmer said. “We have a couple ideas how we’d do it. We just need the law to help us out.”
A legislation tracker by ESPN.com lists 15 states, including Iowa, considering or passing bills that would allow sports betting if the U.S. Supreme Court lifts the ban. The extent of interest nationwide is why Highfill and others believe the NCAA will alter its stance.
“I can’t say that I’m ultra-concerned about this right now,” said Chris Connolly, general manager of Wells Fargo Arena in downtown Des Moines. “We’re not on our own here. It would affect a lot of places that have been NCAA Tournament hosts for a long time.”
If Highfill’s instinct is off and the NCAA does not budge, state leaders will have a difficult discussion on their hands. What money is more valuable: that additional revenue from the sports betting or the money from hosting future NCAA events?
“What happens in the future? Who knows,” Connolly said. “I feel lucky we are set to go in 2019, and after that — let’s see how this all plays out.”
“It could be devastating’ if the NCAA Tournament doesn't return to Des Moines, says Catch Des Moines CEO Greg Edwards.