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Iowa House passes casino moratorium that would block Cedar Rapids proposal
Iowa Racing and Gaming Commission meets next week to decide whether to grant a Linn County gambling license
Southeast Iowa Union offers audio versions of articles using Instaread. Some words may be mispronounced.
DES MOINES — The odds of Cedar Rapids getting its own casino took a hit Thursday when state lawmakers advanced legislation that would prohibit any new casinos in Iowa for at least five years.
It took the Iowa House 11 minutes to pass the legislation, 68-31, that would retroactively enact a five-year moratorium on issuing new casino licenses in the state from Jan. 1, 2025 through June 30, 2030.
The bill also sets new criteria that the Iowa Racing and Gaming Commission would use to consider future casinos, including whether and how much it would drain revenues from existing gambling facilities in Iowa.
House File 144 would thwart Cedar Rapids casino backers' hopes for a new $275 million facility. The move comes as the Iowa Racing and Gaming Commission nears a decision at its Feb. 6 meeting on whether to grant a license for a Linn County casino.
The bill now heads to the Iowa Senate, which advanced identical legislation that could be taken up as soon as Monday.
“Based on all the subcommittee meetings, we knew this was going to go the way it went,” said Kim Pang, vice president of development for Peninsula Pacific Entertainment (P2E), developer of the proposed Cedar Crossing Casino & Entertainment Center. “We continue to believe that we should let the Iowa Racing and Gaming Commission make a decision, and we’ll see what happens next week with the Senate.”
Under the bill, regulators could not issue new casino licenses if they determine doing so would “negatively impact the adjusted gross receipts of an existing” casino by more than 10 percent, or “negatively impact the annual distributions” of grants to community organizations by the casino’s nonprofit license holder.
If an applicant was denied by the commission, another applicant in the same county could not apply for a license for eight years under the bill.
The commission also could not issue new licenses after July 1, 2030, if it “would negatively impact an existing licensee” located in a county touching the Iowa border or a rural county with a population of less than 30,000. The language applies to all except Prairie Meadows in Altoona and Isle Casino in Waterloo, effectively staving off competition to casinos in Davenport and Riverside operated by Elite Casino Resorts.
It also prohibits the IRGC from issuing a new casino license on or after July 1, 2030, until the issuance of a socioeconomic study on gambling in the state due in 2029.
State Rep. Heather Hora, who represents Washington County and parts of rural, southern Johnson County, said the legislation was a win for her community, where the Riverside Casino is a major employer and revenue stream for the nonprofit Riverboat Foundation, which has awarded over $58 million in grants to local groups, schools and governments since 2006.
“If there were a new casino in Cedar Rapids it would strain existing operations, jeopardize jobs and reduce vital funding for communities that rely on casino foundation grants,” Hora said in a statement. “Without the Riverside Casino and Golf Resort and WCRF, who else would have had the capacity to provide this level of community investment in my district? I was proud to be an advocate for the bill and glad that my colleagues in the Iowa House understand and appreciate the importance of supporting our rural communities.”
House and Senate lawmakers amended the bill to remove a requirement for the state gambling regulator to study internet gaming’s impact on Iowa and issue a report with findings and recommendations to the Iowa Legislature by Jan. 1, 2026.
Sen. Scott Webster, R-Bettendorf, chairs the Senate Local Government Committee that advanced the legislation Thursday. Webster, whose district includes Rhythm City Casino Resort in Davenport and Isle Casino Hotel Bettendorf, said some on the committee saw the “e-gaming” study as an expansion of gambling in the state, and felt it inappropriate to include it in a bill seeking to do the opposite.
“And we don’t believe that belonged in this particular bill, and thought that it should be a grander conversation in a separate bill in a separate situation,” Webster said.
He did not know when the Senate would debate the bill.
“I think history has shown if the Iowa Senate needs to move quickly, we can move quickly,” Webster said, adding he did not believe it was incumbent on the Senate to pass the bill before state gambling regulators meet Thursday to vote on the Cedar Rapids casino license.
“With it being retroactive … I don’t think it does necessarily have to be done by that date. I think it just gives a little bit more certainty,” he said.
Studies: New casino would pull patrons from existing casinos
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 and dilute the state’s gambling market.
Two market studies ordered by the Iowa Racing and Gaming Commission say a proposed Cedar Rapids casino would largely rely on pulling patrons from other Iowa casinos.
Marquette Advisors of Minneapolis estimates the Cedar Crossing Casino would generate about $118 million in adjusted gross revenues annually by 2029. However, more than half — $68 million — would come from siphoning off customers from existing Iowa casinos.
It projects Riverside Golf & Casino Resort would see a $34 million hit by 2029 — a 26 percent slice of its revenue. Meskwaki Bingo Casino Hotel would lose $14.1 million, Isle Casino in Waterloo $8.8 million, and other casinos across the state would collectively lose $11 million.
The Innovation Group of New Orleans forecast Cedar Crossing would generate $116 million in yearly revenue by 2028, with a little more than half representing new gambling revenue to the state. About $56 million is projected to come through cannibalization, mostly from casinos in Riverside and Waterloo.
Cedar Rapids casino backers, though, emphasize the $60 million in new gaming revenue for the state projected by Innovation Group.
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.
Cedar Rapids Mayor Tiffany O’Donnell and representatives from Iowa State Building and Construction Trades Council, 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.
“For decades, the Iowa Racing and Gaming Commission has been trusted with making responsible, data-driven decisions about the gaming industry in our state,” O’Donnell told lawmakers Thursday during a Senate subcommittee hearing on the legislation.
“They're asked and tasked with ensuring that Iowa's gaming industry is competitive, it's sustainable and it's beneficial,” O’Donnell said. “ … Yet we find ourselves in this debate today, here in front of you, not because of sound policy, but because some want to change the rules mid-game to protect their own interests. … This is an opportunity for us to innovate gaming in this state and make it relevant, if not even profitable.”
Backers argue new casino would add jobs, $40M in tax revenue
An economic impact study commissioned by the casino developer projects a Cedar Rapids casino would generate $2.25 billion from construction and 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.
P2E 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, said Anne Parmley, president of the Linn County Gaming Association.
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, Parmley said.
Rep. Bobby Kaufmann, R-Wilton — who led passage of the bill in the House and represents the area where the nearby Riverside Casino & Golf Resort is located — has said he worries about potential job losses and other negative effects for his district, should a Cedar Rapids casino be built.
“I think the cannibalism is very real,” Kaufmann said, citing the recent studies suggesting a Cedar Rapids casino would draw customers and revenue from existing casinos.
Lawmakers: Listen to the voices of Linn County voters
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.
The state later implemented a two-year moratorium on new gaming licenses. That moratorium expired July 1 last year, allowing Cedar Rapids casino backers to move ahead with their third attempt at securing a Linn County gaming license.
Rep. Sami Scheetz, D-Cedar Rapids, said the legislature should let the Racing and Gaming Commission make the call, and noted Iowa Code already spells out criteria for evaluating new casino licenses, including market saturation, “cannibalization” and overall impact on gaming revenue for the state of Iowa.
“It shouldn’t be our job, the second of third week of session, to be protecting existing casino operators,” Scheetz said.
Kaufmann said current state law is too vague.
“I find that the (law) is full of suggestions of which they have taken, but I'm not comfortable allowing that up to chance,” Kaufmann said. “ … And I do believe we are in the correct purview to tell the Iowa Racing and Gaming Commission how they should make major decisions. We created them.”
Webster as well said the bill is needed to set “guardrails” for how casino expansion happens in Iowa “before it just rapidly takes off at a pace out of anybody's control.”
“If we think that one casino is in question on this bill, I think we're definitely wrong. This is about casinos throughout the state of Iowa,” he said.
Rep. Aime Wichtendahl, D-Hiawatha, said the moratorium overrides the will of Linn County voters, who twice passed referendums authorizing gambling in the county in 2013 and 2021. The 2021 vote permanently authorizing gaming in the county.
“A previous moratorium that has straight-jacketed our economic development plans because of pay-to-play politics,” Wichtendahl said. “… This moratorium cancels the jobs of hundreds of Linn County residents. It turns away entertainment, tourism and visitors to Iowa at the time that the state budget is hemorrhaging dollars and says, ‘No,’ to much needed tax revenue for the state of Iowa. This bill potentially eliminates $60 million in gaming revenue for the state of Iowa and removes a valuable tool for this assembly's bid to lower the property taxes for our fellow Iowans.
“ … To my fellow members of this assembly, I say I do not believe that you would accept this level of government interference in your district's economic well-being. I ask you today, let the chips fall where they may. Let not this government being in the business of micromanaging the local economy. The voters in the market have spoken, and I humbly ask for you to listen to their voices.”
Sen. Dawn Driscoll, a Republican from Williamsburg, voted for the moratorium in committee Thursday. Her district includes Riverside Casino.
“And I’m here to fight for the people that have worked there, our rural communities and the businesses that are around that,” Driscoll said.
In a statement to the Southeast Iowa Union Friday, Driscoll said she shared others’ concerns about a Cedar Rapids casino cannibalizing others like Riverside’s.
“A casino moratorium is very important to my constituents and my area, and I have been working hard to get this bill through the process,” she said. “Having an additional casino built in Cedar Rapids would significantly hurt our community. Riverside Casino is an Iowa-based company that continues to reinvest into its properties to grow their business and ensure they maintain first-class entertainment for our community.”
The Southeast Iowa Union’s Kalen McCain contributed to this report.
Comments: (319) 398-8499; tom.barton@thegazette.com
