Iowa set a dubious tone for the past 12 to 16 months as criminal investigations ensnared student athletes from both the University of Iowa and Iowa State. In the aftermath, the schools, along with regulators, have vowed to toughen rules to lessen the chance of a repeat.
First, sportsbook operators have to maintain a list of prohibited bettors, among them just about anyone associated with the team. Those permitted to bet would use multifactor authentication. Sportsbooks have to submit an annual report on geolocation test as part of the effort to keep out-of -state bettors from wagering.
“I applaud them for understanding there could have been some gaps in their current rules,” Matt Holt, founder and chief executive officer of U.S. Integrity, told the Gazette.
Holt’s company partners with sports teams, leagues and sports-betting operators to ensure integrity of sports betting. “Obviously issues in the state itself, at Iowa and Iowa State, sort of highlighted the need for a real prohibited bettor mandate that is sort of in line with what we see across the country,” he continued.
The criminal charges in Iowa last year against students and former students made national news. The Iowa Division of Criminal Investigations (DCI) has charged 25 people as part of the ongoing investigation, the agency said. Of those, 16 have pleaded guilty to underage gambling, a simple misdemeanor. Original charges included a different name to conceal identification.
In August the state gave permission to the Iowa Racing and Gaming Commission to pursue new rules for sport betting. The commission released a draft proposal. Here are some highlights:
Maintain a list of prohibited people (or participate in a group that maintains a list); Require the last four digits of Social Security numbers as a verification point; Perform geolocation tests and submit annual results to the commission; Require multifactor authentication on devices; Post warnings against underage use.
Several student-athletes tampered with records in an effort to hide their identities, Iowa State’s then-quarterback Hunter Dekkers, among them.
“One of the things that has triggered a lot of these investigations to catch some of these individuals playing under false pretenses has been the account sign-up which wasn’t matching banking info,” Holt told the Gazette. “Mom, Dad, your brother, your girlfriend, your boyfriend, your cousin sign up for the account for you, but then you’re funding with your Venmo, your PayPal, your bank account.”
Brian Ohorilko, who left as executive director of the commission January 1 told the Gazette he anticipated the rules could be modified.
“We anticipate some changes as stakeholders have indicated that this type of requirement may infringe on some federal banking regulations,” he said. The Iowa Bankers Association and other unidentified stakeholders weighed in on the earlier version before the changes were made, the new proposal says.
Checking bank account information will become the industry standard in the next 18 months, Holt said.
As it stands now, companies like U.S. Integrity have created a way for teams and leagues to share prohibited player lists in platforms that offer protection. Sportsbooks access these lists to make sure prohibited bettors don’t bet.
“There is a little bit of ambiguity that goes into those lists,” Holt said. “What if this guy is an equipment manager to the women’s volleyball team? Should he be able to bet the men’s baseball team? I think most of the leagues and conferences have taken the approach if you have locker room access or travel with the team, that falls within the ‘person of influence’ category.”
The behavior that resulted in criminal charges at Iowa and Iowa State is happening all over the country, or at least it was last year.
“We have not seen any other organization make the attempts they (DCI) did to uncover this type of activity,” Holt told the Gazette. “All the educational efforts by many conferences and the schools since then have helped deter and bolster efforts to make those numbers lesser than we saw at Iowa and Iowa State.”
Back in October 2021, the DCI created a team of special agents devoted to overseeing the rapid growth of sports betting in Iowa since its debut in 2019. In 2022, for example, the team investigated suspicious activity in 11 of 18 casinos with sportsbooks. That year, investigators uncovered 34 incidents.
By 2023, the Sports Wagering Team found 204 cases related to sports betting or other forms of internet gambling, such as those involving online casinos or other websites that originate outside the United States.
DCI Assistant Director Dave Jobes said his agency has been in close contact with the Racing and Gaming Commission as the group revised sports betting rules and “supports the efforts.”
