Iowa riverboat gambling celebrates 25 years on the water

CORRECTIONS (March 28): 

Gaming in Iowa has produced more than $6 billion in tax revenue for the state since the first riverboat casinos opened 25 years ago. This story originally listed an incorrect total, which was provided by the Iowa Gaming Association.

Former Iowa legislator Mike Van Camp did not vote on the 1989 legislation that legalized riverboat gambling in Iowa, according to the official Iowa House Journal, despite Van Camp's and former House Speaker Don Avenson's recollection in a story published [page, date]. Van Camp left the Iowa Legislature after the 1988 session.

DES MOINES — Riverboats first paddled along the Mississippi River in Iowa on April 1 a quarter-century ago, dropping anchor in a few of the cities suffering most from a crippled state economy.

The riverboat gambling era was not ushered in without controversy or heated debate, however.

Twenty-five years later, most of the riverboats are docked and retired, having given way in some instances to land-based casinos that now dominate Iowa's gambling market.

The industry has generated more than $22.6 billion in tax revenue and creates an annual economic impact of more than $1 billion, according to the Iowa Gaming Association, a not-for-profit organization that represents the state's gambling facilities.

It all started on the Mississippi River 25 years ago Friday.

Ailing economy sparks interest

In the mid-1980s, Iowa was feeling the full effect of the farm crisis and an exodus of manufacturing jobs. Unemployment soared past 9 percent in 1983, more than double what it had been just three years before.

Tom Fey, a former state legislator from Davenport who now works as a Statehouse lobbyist, remembers people leaving the Quad Cities in such great numbers that the city of Rock Island, Ill., removed some traffic lights and replaced them with stop signs.

Fey and his fellow state lawmakers, scrambling for ways to spark the state's economy, began considering riverboat gambling in the mid-1980s, a novel concept at the time.

'Now every state has gambling. …

Back then, it was a big deal,' said Don Avenson, who was Speaker of the House in the late 1980s and also now lobbies at the Statehouse.

The push for riverboat gambling was particularly strong in Eastern Iowa cities, such as Davenport and Dubuque, which were especially struggling at the time.

'The riverboat gambling concept came from Davenport,' Avenson said. 'Davenport was struggling economically, and we thought it would help their economy.'

The interest had been stated, and the groundwork laid. But it would take state lawmakers four years to pass legislation legalizing riverboat gambling.

Chips on the table

Legislators who played central roles in the passage of the riverboat gambling bill in 1989 remember the time vividly and say they still carry some scars from the heated political debate.

'Pardon the pun, but it's always a crap shoot,' Fey said of passing gambling legislation. 'It's a real challenge to try to get a majority vote on a gambling proposal.'

Fey managed the legislation in the House. He said it took four years of 'extensive work' to earn enough support from lawmakers to pass the bill.

'I'll be honest with you, I spent as much time on riverboats (in 1988 and 1989) as I did as chair of the Human Resources Committee, maybe more in the off-session, to try to shepherd that through,' Fey recalled. 'We had to twist arms and work on amendments and try to appease everyone we could possibly appease, bring in as many chamber (of commerce) people, whoever else would support it.'

Opposition, which was strong from some, largely centered on concerns about the effect gambling could have on the state, including gambling addiction and increased crime.

'Everybody just thought everything would go to hell, the people that were against gambling. 'We're going to have crime and prostitution and stealing and people going bankrupt.' Everything you could think of, that was going to happen,' said Sen. Wally Horn, D-Cedar Rapids, who managed the 1989 riverboat bill in the Senate.

Fey said he heard strong words from the critics as well.

'I'm not kidding you. I'd go out in public forums back home, and there were people that accused me of being involved with the mob,' Fey said. 'Some fundamentalists all but accused me of being the devil.'

The legislation narrowly passed both chambers and was signed into law by Gov. Terry Branstad, who was serving during his first stint as the state's governor and initially was hesitant to support riverboat gambling.

'It's something the people of Iowa wanted,' Branstad said this past week. 'My concern was I wanted to protect the integrity of the state, so we built in significant safeguards. I'm proud to say it's been well-managed, it's been honest, and we've kept corruption out. That's not the case in many other states. I think we can be proud of that.

' ...

It's not been without controversy, but I think it's been well-managed.'

Quick to impact, evolve

Two years after the legislation passed, the first five riverboats showed up on Iowa's river shores. The President in Davenport, Diamond Lady in Bettendorf and the Casino Belle in Dubuque were the first to launch on April 1, 1991.

'It just was a tremendous jolt, to create the kind of energy that was needed at the time, for these to start there and obviously grow across other counties across the state in subsequent years,' said Wes Ehrecke, president and CEO of the Iowa Gaming Association.

Fey said the impact was almost immediate in Davenport.

'Our downtown was just like most downtowns, just dying on the vine,' Fey said. 'Initially it helped revitalize many central (business) districts along the river ways, the Mississippi and the Missouri. …

I thought it was really a great benefit to the community.'

In large part because of competition with neighboring Illinois, the state of Iowa in the years that followed loosened many of the restrictions in the original legislation, including measures limiting the amount of money individuals could wager.

By the mid-1990s, the state legalized land-based casino operations. It was the slippery slope to full-fledged casino gambling about which some opponents of the original riverboat proposal warned.

'I'm somewhat disappointed that it was opened up so quickly,' Fey said.

25 years of doing business

Gambling and gambling in Iowa has exploded since the riverboats first hit the water 25 years ago. There are now 19 commercial casinos in Iowa — though none yet in Cedar Rapids, despite efforts to establish one.

Supporters point to gambling's economic benefits. In addition to the tax revenue it generates, the industry supports more than 9,500 jobs, and a provision that requires casinos disperse some of their revenue through charitable grants has produced $1.4 billion in 29,000 grants, according to the Iowa Gaming Association.

'If Iowa's going to continue to be a quality place to work and live because of what we have to offer — great education, work ethic — we also have to have a place for them to be entertained,' Ehrecke said. 'I think we've exceeded all those expectations in an extraordinary way.'