CasinoClash 2013 -- Reading the Racing and Gaming tea leaves

We're in the tea leaves-reading phase of Linn County's casino odyssey.

The referendum passed. Planning is under way. The Iowa Racing and Gaming Commission is preparing to pass judgment after it receives a license application from local investors this summer. On Friday, commission chairman Jeff Lamberti dropped a few more leaves during an appearance on Iowa Public Radio's “River to River” program. (I also was on the show, briefly, where I said nothing interesting whatsoever. It's a gift.)

Lamberti, an attorney from Ankeny, former Iowa Senate president and one-time candidate for Congress, left no doubt that the commission's decision will be all about the specter of cannibalization, or how much revenue a downtown Cedar Rapids casino would grab from existing nearby casinos.

Lamberti said he doesn't think the commission will have any problem with local investors' facility plans, their restaurants, sports bar, slots, table games and other amenities. It will all come down to the results of one or more market studies measuring a Cedar Rapids casino's effect on state-licensed casinos in Riverside, Waterloo and Dubuque.

“It's far and away the most important issue we have to address,” Lamberti said.

Some, including me, have questioned why the state is so intent on protecting casinos from more competition. Lamberti explained how he sees the state's philosophy.

He contends that Iowa's casino “system” encourages investors to pump $80 million to $100 million or more into large, destination-style facilities that wrap lots of amenities around a core of gambling. The facilities also share their licenses and revenues with local non-profits. In exchange for investments of that size, state regulators offer some protection from unbridled competition. He says that's how the Legislature wants it.

Lawmakers could have opened the floodgates to all proposals, but Lamberti says the state would then be home to many, much smaller, cheaper gambling halls. State leaders have made it clear they don't want that.

Lamberti insists that philosophy doesn't mean the commission will reject Cedar Rapids' bid if it pulls any money away from its gambling neighbors. “There's no magic number, if it's 10 percent 20 percent 30 percent, that's left to the discretion of the Racing and Gaming Commission. Which, quite frankly, puts us in a difficult position,” he said.

“Actually, (a Cedar Rapids Casino) will eat into Riverside, also Isle in Waterloo and to a lesser extent Dubuque. So what we'll do as part of process is the Racing and Gaming Commission will commission a study or studies of the market to try to determine what the impact on those other facilities will be. It's not a situation where if it has an impact we'll reject it, it's just a a matter that we have to get a handle on how large that impact it is so we can make an informed decision," Lamberti said.

Lamberti expects the studying and licensing decision to take eight to 12 months. Plenty of time for us to keep reading and guessing.