In early 2022, a powerful tech company offered to help the Iowa Division of Criminal Investigation's sports wagering unit.
The division, which launched in 2021 to investigate fraud in the state's new online betting market, was struggling to track and monitor gamblers as the industry grew rapidly in Iowa. Unlike the monitoring by DCI's gambling and horseracing investigators, based at casinos and Prairie Meadows racetrack, the agents on the sports betting unit didn't have tools to see who was placing wagers from anywhere in the state.
Then, in March 2022, the unit received an offer from GeoComply, a Canadian company that contracts with sportsbooks like FanDuel and DraftKings to track the locations of their users. GeoComply said it would share the company's software with the DCI and train its agents on how to track bets around the state as they happen.
https://www.desmoinesregister.com/story/news/investigations/2024/04/09/how-a-private-tech-company-pushed-iowa-sports-betting-probe-then-walked/73210982007/?fbclid=IwAR23rTZpWuEFqQSKSCzlXpVHsBaWeNNRNaoyXOhS-37bk4dZEvfRglWeFe8_aem_AfYHB96TuS1nLWpunUdpcLx7lQW6xmcO_OE7ngO67odDycowHFplhbp4wKmjrSOldFBiWMpCpU6CscPBidC_ATAz"We can make huge gains in the discovery of illegal activity that we know is taking place,” DCI Special Agent in Charge Troy Nelson told Brian Ohorilko, then director of the Iowa Racing and Gaming Commission (IRGC), in a July 2022 email.
What followed, however, became a statewide controversy. Without a warrant, a DCI agent used the tool to discover that Iowa State University and University of Iowa athletes were using wagering accounts registered to parents and friends to place bets ― and some bet on their own games.
The investigation netted 25 arrests. It also attracted outrage from politicians, coaches, fans and sports commentators who accused the DCI of violating high-profile athletes' constitutional rights.
A Des Moines Register review of hundreds of DCI and Gaming Commission emails has revealed the origins of the controversial case, showing for the first time that GeoComply played a prominent role in how law enforcement investigated the athletes.
In addition to giving the DCI its software and training agents on how to spot suspicious bets around Iowa, GeoComply officials held monthly meetings with law enforcement investigators around the country to explain where to find "hotspots" of illegal betting, the Register's review found. A DCI agent's memo, meanwhile, suggests that GeoComply helped coach Iowa officials on how to write state regulations that would allow the geolocation company to turn over information without a warrant and without informing sportsbooks.
The Register's review also shows how dependent sports betting investigators have been on the whims of private companies. Without many rights to monitor online wagering in Iowa's current law, DCI agents depended on GeoComply. In January, when GeoComply cut the DCI's access to the tool amid the rising controversy, the agency was once again left without any reliable way to monitor sports betting, an industry viewed as ripe for fraud, money laundering and addiction.
“People are going to be very shocked with how involved GeoComply was with this,” said John Holden, an Oklahoma State management professor who studies sports betting. “We, effectively, have created this self-regulatory system if this is how it’s supposed to work. Do we want that? I think that’s a fair question. Can you trust these companies to do this job?
