A wide-ranging gambling bill that would legalize online poker in Iowa has cleared its first hurdle at the statehouse.

Ned Chiodo is a lobbyist for some of the gambling interests that’re pushing for creation of an online poker network for Iowans. “It’s a growing industry overseas, and most of the play is from the United States,” Chiodo says. 

If the bill is adopted, Iowa could become the first state in the nation to legalize internet gambling. Chiodo suggests up to 150,000 Iowans currently play online poker, even though it’s currently illegal.

“It would behoove the State of Iowa to regulate it in a manner that would protect Iowans, make sure Iowans know who they’re doing business with, know who they’re playing with, know that they are getting a fair game,” Chiodo says, “know that they will get paid if they win.” 

Under the bill, the state’s existing casinos would run the online poker games like “Texas Hold ‘Em” and the profits would be taxed like any other casino revenue.  Chiodo estimates the state could collect as much as $35 million a year from an online poker operation.

But online gambling is only a part of the bill.  The legislation includes language that would settle a dispute between the horse racing industry and the state’s three race tracks.  In addition, it eliminates the requirement that county voters approve gambling referendums every eight years to keep a local casino open. Wes Ehrecke of the Iowa Gaming Association says that’s a welcome change for the state-licensed casinos, but Ehrecke worries the bill may become a catch-all for other gambling-related proposals. 

“We are very concerned about any kind of a tax increase or anything that could be tied to this bill,” Ehrecke says.

Governor Branstad has proposed raising the tax on the state-licensed casinos to 36 percent, up significantly from rates that are now in the 22 to 24 percent range. Others have been pushing to ban smoking on the casino floors. The Senate State Government Committee is scheduled to debate the gambling bill Wednesday.