116 3rd St SE
Cedar Rapids, Iowa 52401
Gaming regulators hear support for, opposition to Cedar Rapids casino
Commission expects to decide on a license at Feb. 6 meeting
Nov. 20, 2024 8:10 pm, Updated: Nov. 21, 2024 7:50 am
The Gazette offers audio versions of articles using Instaread. Some words may be mispronounced.
CEDAR RAPIDS — Dozens of Linn County residents streamed in and out of a hotel ballroom Wednesday to voice support for a proposed Cedar Rapids casino during a nearly five-hour public hearing before the state’s gaming commission.
Iowa Racing and Gaming Commission members met in Cedar Rapids, where they toured the site of the proposed casino and listened to a presentation from developers, residents, business leaders and elected officials.
Members then headed to The Hotel at Kirkwood Center, where they heard from more than 100 speakers voice their support and opposition to a Linn County casino license. More spoke in favor than against the application for a Cedar Rapids casino.
Supporters, including local nonprofits, businesses and union members, argued that 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.
Opponents warned a new facility would cannibalize revenues from other Iowa casinos and dilute, not increase, the state’s gambling market. Casino operators and business, government and nonprofit leaders from Davenport, Dubuque, Waterloo, Cedar Falls, Riverside and the Meskwaki Nation said Iowa’s gaming market is saturated.
They 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.
Wes Ehrecke, president of the Iowa Gaming Association — which represents Iowa’s 19 licensed casinos — said all support a moratorium on new casino licenses in the state.
Some lawmakers have said they intend to file a casino moratorium bill that would block new gaming licenses when the Iowa Legislature convenes Jan. 13.
“It is attempting to locate (a new casino) in an already well-served area that would adversely impact the viability of other casinos,” Ehrecke said, noting Riverside Casino & Golf Resort in Washington County, as well as others in Iowa, continue to reinvest millions with ongoing improvements “to maintain a popular, sizable entertainment footprint.”
“The math simply does not work, and a casino in Linn County only harms all the existing casinos in Eastern Iowa,” Ehrecke said. “It does not bring in outside revenue for our state. By shifting the tourism away from the casinos located on our state border, it makes it even more challenging for them to continue to drive out-of-state tourism into their communities and into Iowa.”
Other speakers expressed concerns about gambling and its impact on the community.
Cedar Rapids real estate professional Jonathan Sladek raised concerns about gambling becoming an investment rather than an entertainment option, highlighting its potential to exploit vulnerable individuals. He proposed increasing the tax on the proposed project to support local projects and nonprofits.
California-based Peninsula Pacific Entertainment, the proposed casino operator, and the Linn County Gaming Association, the nonprofit affiliate and charitable arm of the Cedar Rapids Development Group, the proposed developers of the Cedar Crossing Casino, formally presented plans last month to the state gaming agency for its proposed $275 million development that would be built on the former Cooper’s Mill site on the city’s northwest side.
Plans call for a casino with 700 slot machines and 22 table games, plus a group of restaurants, bars, a 1,500-seat entertainment venue, an arts and cultural center and a STEM lab for families.
The state 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.
Casino backers say the state’s second-largest city should be allowed to benefit from gaming the same as other Iowa communities, and that growth in Iowa’s gaming industry and competition from neighboring states could make Cedar Crossing more relevant.
A study commissioned by the proposed operator and conducted by Convergence Strategy Group suggests a Cedar Rapids casino could increase Iowa's net gaming revenues by over $80 million annually.
Overall, nearly 26 percent of revenue generated by a Cedar Rapids casino is anticipated to come from existing Iowa operators. Supporters argued that’s significantly less than what was projected when the state granted licenses for Grand Falls Casino Resort in Larchwood and Wild Rose Hotel & Casino in Jefferson, and outweighed by the overall gaming revenue benefit.
Riverside Casino would see the largest impact with a projected 11.6 percent drop in gaming revenue. Waterloo’s Isle Casino would lose a projected 5.8 percent while Dubuque’s two casinos would lose 3.6 percent of revenue to a Cedar Rapids casino, according to the study.
The Iowa Racing and Gaming Commission in August selected two vendors to complete its own market study on the potential impacts of a new casino in Cedar Rapids. Those studies are due at the end of December and will be publicly presented at the commission’s January meeting.
The commission expects to vote on granting a license at its Feb. 6 meeting.
Cedar Rapids Mayor Tiffany O’Donnell said the proposal would deliver on a promise to Linn County voters who overwhelmingly said that they want the same opportunity others in Iowa have been granted to create a comprehensive entertainment destination that will enrich the city's arts and entertainment scene.
In 2013 and 2021, Linn County residents passed public referendums authorizing gaming in the county. The 2021 vote permanently authorizes gaming in the county.
O’Donnell said the casino would “serves as an anchor for much needed redevelopment, breathing new life into an area that has long awaited a renaissance.” The project also includes flood control measures and is projected to create more than 1,000 construction jobs and 524 full-time positions.
Peninsula Pacific Entertainment and the Linn County Gaming Association have committed to distributing 8 percent of net adjusted gross revenue to nonprofit organizations, or about $6.3 million 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.
Nonprofit leaders from Four Oaks, United Way of East Central Iowa and Eastern Iowa Health Center said an influx of funding from a casino would help them meet needs in areas like foster care, homelessness, food insecurity and health care.
Nate Kaeding, codeveloper of Kingston Yard — the mixed-use development on the west bank of the Cedar River that includes Pickle Palace and Big Grove Brewery — said a casino “will be complimentary and synergistic to all that we have in Kingston Yard.”
“We think this is going to just help make the entire development a really amazing one-two-punch of entertainment options within walking distance of each other at a destination that is truly unrivaled,” Kaeding said.
The casino also would provide a shuttle to various area destinations, and offer a “point partnership” program, where individuals could use reward credits granted to casino patrons and spend them at participating restaurants, shops, hotels and other businesses.
“There's no doubt in my mind that the casino will lift up and benefit all of the neighborhood businesses,” Kaeding said.
Alan Pierson, president of the Northwest Neighbors Neighborhood Association and owner of Pierson's Flower Shop & Greenhouses, said an influx of visitors from a new casino would provide much-needed economic boost for local businesses like his.
“We’ve gone through multiple disasters,” Pierson said of the devastating 2008 floods and 2020 derecho. “ … We’ve lost thousands of homes, thousands of customers. And I’m here to ask for your support for my neighborhood, for my business.”
Comments: (319) 398-8499; tom.barton@thegazette.com
Daily Newsletters