The Iowa Senate has passed a bill to regulate and tax online prediction market platforms, making it the first US legislative chamber to try to regulate the sector.
Senators voted 45-1 in favor of an amended version of Senate File 2470 on Tuesday. The bill would make prediction markets illegal in the state unless operators obtain a license from the Department of Revenue and pay taxes on event contract activity.
The proposal was initially introduced to the Senate Ways and Means committee in January by Sen. Mike Klimesh and advanced through committee in March.
It applies to sites that let users trade event-based financial contracts tied to outcomes such as sports events, elections, and economic indicators, and proposes a 20% tax on revenue from these contracts as well as a 20% excise tax on the purchase price of each contract.
