Casino moratorium dies in senate

DES MOINES — A proposed five-year moratorium and set of restrictions on state-licensed casinos in Iowa died in the senate on Tuesday according to lawmakers, clearing the way for state regulators to decide later this week on a proposal for a new casino in Cedar Rapids.

Iowa Sen. Ken Rozenboom, a Republican from Oskaloosa, announced Tuesday afternoon that House File 144, which would have prohibited any new state casino licenses for at least five years, will not advance in the Iowa Senate this year.

The proposal passed the Iowa House last week, just as it also did at the end of the 2023 legislative session. But in both cases, the proposal died in the Senate.

“According to my conversations, this bill did not have enough support from Senate Republicans to advance all the way through the Senate process,” Rozenboom, who chairs the Senate State Government Committee that was considering the bill, said in a statement. “In the interest of moving this session forward to other issues of critical importance to Iowans, I have no plans to reconsider the legislation for the remainder of this session.”

Rozenboom added, “I am no fan of gambling and my decision not to advance this legislation should not be considered in support of casino expansion.”

The five-member Iowa Racing and Gaming Commission meets Thursday to decide whether to grant a license for a planned $275 million casino and entertainment center near downtown Cedar Rapids.

WCRF director: Cedar Rapids is ‘a big bully’

The casino would be built on Cedar Rapids’ northwest side on vacant land that was once the site of a hotel until it was demolished after sustaining damage from flooding in 2008 and 2016.

The proposed Cedar Crossing Casino & Entertainment Center would include 700 slot machines, 22 game tables, restaurants, bars, an entertainment venue with a 1,500-person capacity, an arts and cultural center and a STEM lab for children.

The Iowa Racing and Gaming Commission twice has rejected proposals — in 2014 and 2017 — to bring a casino to Cedar Rapids. At the time, commissioners cited concerns that a new facility would siphon off existing customers from current casino properties in Eastern Iowa.

Two market studies ordered by the commission say a proposed Cedar Rapids casino would largely rely on pulling patrons and revenue from other Iowa casinos, but add approximately $60 million in net new gaming revenues to Iowa annually.

The state’s existing casinos support a moratorium, saying Iowa’s casino market — with 19 commercial casinos and four tribal casinos — is saturated and that a new facility would “cannibalize” revenues from them.

Casino operators and business, government and nonprofit leaders from Davenport, Dubuque, Waterloo, Cedar Falls, Riverside and the Meskwaki Nation have warned that granting a Linn County casino license would lead to job losses and business closures, and strain local government and nonprofit budgets due to reduced tax and grant revenue from gambling operations.

“The second-biggest city in Iowa is a big bully,” Patty Koller, executive director of the Washington County Riverboat Foundation — Riverside Casino & Golf Resort’s nonprofit affiliate — told lawmakers Tuesday during a Senate subcommittee hearing on the House bill.

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“Every few years our livelihood is threatened,” Koller said of the push to build a casino in Cedar Rapids. “It is because of our success that they look down on Washington County. They want what we have, and because they are bigger than we are, because they are the second-largest city in Iowa, they think they have a right to take it. Well, it’s time to put a stop to the bullying.”

The foundation had filed a petition for an IRGC declaratory order that would effectively block the Cedar Rapids proposal in November, arguing the plan relied on an allegedly improperly worded ballot measure approved by Linn County voters in 2021. That request was denied by commission members after their meeting last month.

Representatives from the group say they could lose much of their casino-provided funding if a new one is built in Cedar Rapids, saying it would “cannibalize” revenue and jobs from Riverside.

“In our rural landscape, the partnership to this stunning venue has contributed significantly to our region’s identity, to our nonprofits, and to our communities,” WCRF Board President Stephanie Sexton said at the group’s grant award celebration night in December. “We need our voices heard … so that this foundation, and your nonprofits, can continue to look forward to a future of possibilities, and a future of opportunities.”

Locals say it’s hard to overstate the impact of such a trade off for Washington County’s communities. The Riverboat Foundation has issued over $70 million in grants to local nonprofits, schools and governments since the casino opened in 2006.

Washington Chamber of Commerce Executive Director Michelle Redlinger said the foundation had been a godsend for county communities in the last 19 years, as its funds helped complete a YMCA indoor pool, build a performing arts center, upgrade baseball fields and obtain fire trucks.

She noted that Washington had only about $80,000 of annual hotel/motel tax revenue to fall back on for community improvement projects, compared to Cedar Rapids and Marion, where the tax brought in over $432,000 in January of this year alone..

“In the 13 years I've been the director of the Washington Chamber and Welcome Center, we have had to fight tooth and nail to get funding and projects come our way,” Redlinger said. “Rural communities don't have anywhere near the same opportunities as our urban counterparts. If it were not for the generous contributions from the Washington County Riverboat Foundation, our community would be night-and-day different.”

State lawmakers representing Washington County expressed similar concerns.

Rep. Heather Hora, a Republican whose district includes Riverside, said she worried revenue lost to a Cedar Rapids casino would lead to job losses and was “disappointed that a handful of senators held a bill hostage.”

“We should, as legislators, support rural Iowa up here,” Hora told The Gazette Wednesday morning. She said she intended to continue conversations and push legislation setting more stringent “guideposts” that state regulators must consider when granting a new casino license.

“I think the rules package that was part of the moratorium bill was maybe the more important part of it — setting the criteria that a new casino would have to fit in before it’s even considered,” Hora said. “ … I don’t think that we want a casino to be on every corner. We want our casinos to be destinations, to kind of bring out-of-state money in.”

Hora continued: “They can do their job, but (we need) to have parameters in place that doesn’t hurt rural Iowa … or whoever it pertains to at the time.”

Sen. Dawn Driscoll said she was frustrated by the bill’s failure in her chamber, but was not immediately available for further comments. She has previously voiced concerns similar to Hora, however, touting the moratorium bill as a top priority going into this legislative session.

Supporters of CR casino argue economic benefits

Backers say the state’s second-largest city should be allowed to benefit from gaming, the same as other communities, and that growth in Iowa’s gaming industry and competition from neighboring states could make the proposed casino more relevant.

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O’Donnell and representatives from Iowa State Building and Construction Trades Council, North Central States Regional Council of Carpenters, Master Builders of Iowa and affiliated local unions said the proposed casino would boost the local economy, create jobs, support community projects and enhance the quality of life by attracting more tourists and providing more entertainment options.

“Times are different today, I believe,” O’Donnell said. “ … The time is right. The data shows that and our city is a very different position, too. It’s my hope the commission sees this for the economic development opportunity that it is.”

An economic impact study commissioned by the casino developer projects a Cedar Rapids casino would generate $2.25 billion from construction in the first 10 years of operations. It’s expected to support 792 construction jobs and employ 365 workers once open. The study also projects the casino would generate more than $43.5 million in tax revenue, with state and local contributions at more than $34 million.

Casino developer Peninsula Pacific Entertainment and the Linn County Gaming Association also have committed to distributing 8 percent of net adjusted gross revenue to nonprofit organizations annually — more than twice the state-mandated minimum. Of that, 10 percent would be distributed to nonprofits in adjacent counties.

An influx of funding from a casino would help nonprofits meet needs and expand services in areas like foster care, homelessness, food insecurity and health care, according to the Linn County Gaming Association, the nonprofit affiliate and charitable arm that jointly applied for a Cedar Rapids casino license with P2E.

IRGC hearing scheduled for Thursday

The proposed Cedar Rapids casino’s fate now lies in the hands of the Iowa Racing and Gaming Commission, which will meet in Altoona Feb. 6 to approve or deny the application from investors in Linn County.

All eyes are now on the commission, as it prepares to issue its decision.

“The next hurdle is the Iowa Racing and Gaming Commission so our focus remains on that now,” Cedar Rapids Mayor Tiffany O’Donnell told reporters after Rozenboom announced he would not bring forward the bill in committee. “I’m really hopeful that the commission will see the overall economic development opportunity we have with this project. … It’s a $275 million entertainment venue that will bring new life to a part of Cedar Rapids downtown that was decimated in the floods of 2008.”

Erin Murphy of The Gazette contributed to this report.

Comments: Kalen.McCain@southeastiowaunion.com