The US state of Iowa doesn't have an NFL team. It has four — kind of.
The Chicago Bears, the Minnesota Vikings, the Kansas City Chiefs, and the Green Bay Packers all have passionate followings in Iowa, which is bordered by six US states.
The state's surprisingly strong NFL fandom — for not having a team of its own — is one of a confluence of factors that could make Iowa a sleeper hit for sports-betting companies.
Iowa also has a rabid fanbase for college sports teams like the Hawkeyes and the Cyclones. And it has a rather low barrier of entry for bet takers who want to set up shop there.
"Iowa is one that I think a lot of people didn't follow closely," Brian Musburger, founder and CEO of Vegas Stats and Information Network, a media startup dedicated to sports betting, told Business Insider. "I've been stunned, stunned by the level of interest from Iowa."
In May 2018, the US Supreme Court overturned in 2018 a federal ban on sports gambling, allowing states to regulate gaming. Iowa is one of dozens states that have legalized, or moved to legalize, sports betting since then.
Sports betting was legalized in Iowa in May, and the first sportsbooks opened in the state on August 15.
In the first month and a half of betting, $47 million was wagered in Iowa, including $38.5 million during the month of September, according to the Iowa Racing and Gaming Commission.
It's a small, but growing market. In New Jersey, where sports gambling was legalized in 2018, $446 million was wagered in September. New Jersey's population is three times Iowa's.
Iowa has a unique mix of bettors
For some, early betting exceeded expectations in the state.
BetWorks, a sports-betting technology company that operates sportsbooks with Elite Casino Resorts in the state of Iowa, told Business Insider the betting activity it's seen in Iowa is 20% higher than the levels the company expected by October.
"It's been very, very surprising to us how well the activity level has been," Jay Rood, chief risk officer at BetWorks said.
Early betting in the state is being driven mostly by football. That includes both college matchups — led by teams like the Hawkeyes, Cyclones, and Panthers — and professional matchups, which is somewhat rare.
"They're one of the few states that is passionate about betting on Saturdays and Sundays," Musburger said, referring to college football games on Saturdays and NFL games on Sundays.
Wagering on baseball has also been strong, Rood said. Betting on the NBA, which kicked off its regular season on October 22, has been promising. There hasn't been as much activity around hockey, he said.
Iowa's sports fans are casual betters. The vast majority of the wagers BetWorks has seen in the state are straight bets, Rood said. In more mature betting markets, like New Jersey, players go for bigger scores with parlays, a kind of bet that involves two or more teams winning to get a payout.
"The Iowa bettor is strongly recreational," Rood said.
Iowa has a relatively low barrier of entry for bet takers
Iowa law makes it pretty easy for people to place and take bets.
People can place bets in person at licensed casinos or via mobile platforms anywhere in the state, though players must first visit the casino to set up their online accounts.
Only casinos in Iowa can apply for sports-betting licenses. But each license can hold up to two sportsbook brands.
The license fee Iowa operators pay is $45,000, and $10,000 to renew. New Jersey, by comparison, has a $100,000 license fee, and Pennsylvania charges a whopping $10 million one-time fee.
Iowa operations also pay a 6.75% tax on net revenue, which ties Nevada for the lowest tax rate in the country, as the Des Moines Register reported.
"It's probably, next to Nevada and New Jersey, one of the most accommodating and conducive places to set up an operation," Rood said.
Sports betting is still very new in Iowa, and not all the casinos have sportsbooks up and running. But insiders say it's one to watch.
"You're going to see a lot of companies hanging a shingle in Iowa," Musburger said.