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HF 260

A bill for an act relating to the Iowa lottery.

2025-2026 Regular Session

HF 260 tightens Iowa Lottery security and ethics, adds independent CPA oversight of drawings, restricts records, and clarifies transfers of lottery revenue to the General Fund.

Signed by Governor.
#gambling #generalfund #lotteries #reports #revenuedepartment #statelottery
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Bill Summary · HF 260

Summary — HF 260 (Iowa Lottery Operations)

Status: Signed by Governor (March 28, 2025)
Introduced: February 6, 2025 — Passed House and Senate unanimously (House 92–0; Senate 41–0). Amendment H‑1014 adopted. Substituted for SF 306.

Purpose

HF 260 updates Iowa Code chapter 99G to clarify and strengthen procedures, security, record confidentiality, and financial handling for the Iowa Lottery. The bill refines definitions, adjusts governance and operational authorities, tightens conflict‑of‑interest restrictions for prize eligibility, modifies security staff roles, and changes how and when lottery receipts move to the State General Fund.

Key provisions and changes

  • Definitions

    • Adds a new definition of “lotto”: an on‑line, centrally connected number‑selection lottery game.
    • Revises definition of “self‑service kiosk” to clarify it dispenses printed lottery products (on‑line lotto, instant, pull‑tabs) and explicitly is not a monitor vending or player‑activated gaming machine.

  • Governance, rules, and hearings

    • Director (or designee) may conduct hearings and administer oaths to assure lottery security/integrity and to determine vendor/retailer compliance.
    • Administrative rules may be adopted that relate exclusively to lottery management/operation (not general department operations).

  • Drawing procedures and oversight

    • Drawings must be open to the public and witnessed by an independent certified public accountant (CPA).
    • Equipment used to select winners or prize participants must be examined by an independent CPA prior to and after each drawing.

  • Employment eligibility

    • Removes the categorical prohibition on hiring persons convicted of crimes involving moral turpitude; retains prohibitions for felonies, bookmaking, or other illegal gambling, and gives the director discretion to assess relevance of other crimes for lottery employment.

  • Conflict of interest / prize ineligibility

    • Expands and clarifies categories of persons ineligible to purchase tickets or receive prizes: commission members; department officers/employees; state employees providing services to the lottery who have access to confidential information; vendor officers/employees/agents/subcontractors with access to confidential information.
    • Extends prohibition to household members (spouse, parent, child, sibling) residing in the same principal residence for 183+ days in the prior 365 days.

  • Records and open‑records exemptions

    • Adds ticket order history, ticket inventory, and any records whose disclosure could impair lottery security, integrity, or retailer security to Code chapter 22 (open records) exemptions.

  • Lottery security office and investigators

    • Clarifies lottery security staff are investigators supporting the division; may include staff with law‑enforcement training but they do not hold sworn peace‑officer status.
    • Security office shall report suspected violations to appropriate county attorneys, the attorney general, or law enforcement with jurisdiction, and ensure physical security at central operations facilities.

  • Financial reporting and transfers

    • Director must report lottery revenues and expenses quarterly and annually to the commission, governor, auditor of state, and General Assembly.
    • Director certifies before the last day of the month following each quarter the portion of the lottery fund to be transferred to the General Fund.
    • Final enrolled language requires the certified portion be transferred to the General Fund within 45 days after the end of the quarter (allows retention of an amount sufficient to cover foreseeable administrative expenses for up to 21 days upon director request and treasurer approval).
    • Interest/earnings on lottery deposits are treated as lottery revenue and transferred in the same manner.

Who is affected

  • Iowa Lottery Division, Department of Revenue (lottery administration)
  • Lottery commission members, lottery employees, state employees involved in lottery administration
  • Lottery vendors, their employees/agents/subcontractors
  • Lottery retailers (security implications)
  • Requesters of public records seeking certain operational records
  • Department of Management (clarifies treatment of lottery revenues in general‑fund revenue estimates; exception preserved for revenue estimating conference under section 8.22A)

Procedural/timeline notes

  • Introduced Feb 6, 2025; amendment H‑1014 filed Feb 18 and adopted Feb 20. Passed both chambers late Feb 2025. Reported correctly enrolled and signed by Governor March 28, 2025.
  • The bill amends multiple sections of Iowa Code chapter 99G; the effective date follows standard Code enactment practice unless stated otherwise (bill text does not specify a distinct effective date).

Potential effects

  • Strengthens security and integrity safeguards (CPA oversight of drawings; narrower disclosure of sensitive records).
  • Tightens conflict‑of‑interest rules to reduce perception/risks of improper prize awards.
  • Gives the lottery director more operational discretion (employment decisions; limited short‑term retention of funds).
  • Narrows public access to certain lottery operational records, which may limit external oversight but is framed as necessary to protect game security and retailer safety.

Compiled from official sources — confirm details with the bill’s official record.

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