State regulators slated to vote on Linn County gaming license in February 2025

CEDAR RAPIDS — State regulators will decide the fate of Cedar Rapids casino backers’ third try for a gaming license on Feb. 6, 2025 after gathering public input and reviewing results of a study on the Linn County market.

The five-member Iowa Racing and Gaming Commission, which oversees Iowa’s 19 state-licensed casinos, met Friday to set a timeline for reviewing Linn County gaming license applications. This launched the process for Linn County gaming interests to seek a license after two failed bids in 2014 and 2017.

Iowa lawmakers in 2022 passed a two-year moratorium blocking new licenses, but failed to extend the pause before the legislative session adjourned in April. The moratorium halted Cedar Rapids’ third attempt, as the commission in 2022 had decided to take applications for a Linn County license when the legislative pause took effect.

Now that the pause has expired, the commission on Monday directed staff to issue a request for proposals for a vendor to conduct a market study assessing how a Linn County casino would impact Iowa’s gaming industry.

Commissioner Daryl Olsen said the study should look specifically at Linn County and statewide effects of a casino there. That would explore whether a market is over- or underserved by casinos and how it might affect existing gaming revenue.

The Linn County Gaming Association and the city’s preferred potential casino operator, Peninsula Pacific Entertainment, shared Monday they were prepared to jointly apply this month for a gaming license for a Cedar Rapids casino. The city has had a long-standing deal with the Cedar Rapids Development Group — an entity of mostly local investors — guaranteeing its exclusive support in the licensing process.

Olsen said “knowing that an application is pending, the commission has certain responsibilities including developing a timeline for the process” specifically for Linn County.

The timeline “allows adequate time to gather the needed information, completely review this information and then make a decision,” Olsen said.

Market study proposals will be due to the commission Aug. 15. Potential gaming market study vendors will present to the panel at the Aug. 29 meeting in Riverside. The commission will then select a vendor to conduct the study.

Linn County casino backers have until Sept. 16 to apply for a gaming license from the commission. New casino applicants will present to the commission Oct. 3.

The commission will conduct site visits and offer an opportunity for public comment on Nov. 20 in Linn County. At the Nov. 21 regular meeting in Burlington, the commission will potentially receive Iowa Division of Criminal Investigation background reports in executive session.

Market studies would be due Dec. 30 at the commission’s office. Olsen said all vendors contacted said they need 60 to 120 days to complete the study. The commission would review those studies over the holidays.

At the panel’s January meeting in Jefferson, if the DCI background reports were not completed in November, these would be presented in executive session to the commission then. The market study also would be publicly presented at this meeting.

The panel is slated to vote on applications at a Feb. 6 special commission meeting.

“It’s important for commissioners we get this decision done,” then review new license applications for other casino at the commission’s typically packed March meeting, Olsen said.

The process traditionally takes six to nine months, commission administrator Tina Eick said.

Commissioner Alan Ostergren said he thinks it’s appropriate for the panel to have a Linn County site visit. The commission also will take written public comment so people are “free to tell us what they think about this” between Nov. 20 and Feb. 6.

“We’ll listen to Iowans up until we make the licensing decisions,” Ostergren said.

Eick said staff have already received input and will make it available to the commissioners.

“Everyone understands the timeline we’re working under,” Olsen said. “There are no surprises.”

Casino ‘vision’ in the works

Kim Pang, Peninsula Pacific Entertainment’s vice president of development, said the development team continues to put together its vision for the project, but doesn’t plan to release details until the commission first reviews applications.

“I think it'd be appropriate for us to present it to commissioners and then open it up to the public,” Pang said. “Whatever it is, it's going to be a pretty big investment. $275 million is a hefty ticket to carry, and with $275 million, we're going to have a state-of-the-art property.”

That is a greater investment than initially proposed in the plans for a $250 million, 160,000 square-foot gaming and entertainment complex Peninsula Pacific Entertainment shared in 2022.

Before the two-year state pause, regulators moved to consider applications again after Linn County voters in 2021 passed a public referendum authorizing gaming in the county on a second-consecutive vote. That allowed casino backers to seek a license in perpetuity, so the measure won’t have to come to voters again.

The Cedar Rapids City Council last year signed off on an option-to-purchase agreement with the Cedar Rapids Development Group to set aside city-owned property between F and I Avenue NW and First and Fifth Streets NW to be purchased and redeveloped into the Cedar Crossing Casino.

This was the site of Cooper’s Mill, home to a motel and restaurant, before it was destroyed in the 2008 flood and later demolished. The group paid the city $165,000 for the option to purchase the property. The plans call for flood protection infrastructure along the west side of the Cedar River.

Pang said the commission’s in-person public input session will give the panel and the public an opportunity to show off their plans for the facility and how it will impact the community.

Anne Parmley, president of the Linn County Gaming Association said nonprofit officials also will be present to share “the impact of the gaming revenue on their ability to do their work and serve their clients here in Linn County.” The nonprofit association would allocate 8 percent of annual gaming revenue to area nonprofits — the highest revenue share of any casino in the state.

Having this timeline is “one step further than we were before the moratorium and a really important step,” Parmley said.

‘Cannibalization’ concerns

In 2022, the commission released market studies from Spectrum Gaming Group and Innovation Group showing Nebraska’s gaming facility growth along Iowa’s western border would eat into industry revenue in Iowa. Cedar Rapids casino backers have argued this is why regulators should OK a casino in Iowa’s second-largest city.

One study projected Iowa gaming revenue would fall by $183 million annually, while another projected it could drop by $256 million because of increased competition from neighboring states.

The Innovation Group study showed a Cedar Rapids casino would take $61 million from existing casinos in the same market, but would boost Iowa’s net commercial gaming revenue gain by $51 million.

Pointing to that potential revenue boost, Pang said, “we believe that we can cohabitate with neighboring casinos.”

Comments: (319) 398-8494; marissa.payne@thegazette.com