116 3rd St SE
Cedar Rapids, Iowa 52401
Iowa lawmakers introduce bills that could block Cedar Rapids casino proposal
Bills would create 5-year moratorium on state licenses
Jan. 23, 2025 11:56 am, Updated: Jan. 24, 2025 7:23 am
The Gazette offers audio versions of articles using Instaread. Some words may be mispronounced.
DES MOINES — Bills to create a five-year moratorium on new state-licensed casinos in Iowa have been introduced by Republicans in both chambers of the Iowa Legislature.
The legislation potentially could thwart Cedar Rapids casino backers' hopes for a new $275 million facility.
Sen. Jeff Reichman, a Republican from Montrose, introduced a bill Wednesday — Senate File 76 — that would prohibit issuing new casino licenses in the state through June 30, 2030.
Reichman said gambling in Iowa “has grown and grown” over the last 40 years from dog tracks to riverboats to land-based casinos. “I don’t know that it needs to grow anymore,” he said.
Asked whether there’s support in the Iowa Senate to pass the bill, Reichman said: “We don’t know where the votes are. … We’ll go through the legislative process and see what comes out the other side.”
Lobbyists for the Master Builders of Iowa and Cedar Rapids Development Group LLC — a subsidiary of casino developer Peninsula Pacific Entertainment, which is proposing to build Cedar Crossing Casino & Entertainment Center — have registered against the Senate bill.
Rep. Bobby Kaufmann, R-Wilton, chair of the House Ways and Means Committee, said House Republicans intend to fast-track their own bill.
Kaufmann, who represents the area where the nearby Riverside Casino & Golf Resort is located, led passage of an amendment in the House last year that would have extended a 2022 pause on new casinos in the state. The amendment passed with bipartisan support, 71-21, in the waning hours on the last day of the 2024 legislative session. The Iowa Senate, however, adjourned without taking up the measure.
‘Benefit does not outweigh people losing their jobs’
He said he worries about potential job losses and other negative effects for his district, should a Cedar Rapids casino be built, and pointed to two new market studies ordered by the Iowa Racing and Gaming Commission that say a proposed Cedar Rapids casino would largely rely on pulling patrons from other Iowa casinos.
“My personal district in Cedar County employs hundreds of individuals at Riverside. I know that many people in this room have constituents employed by Waterloo, Dubuque, Quad Cities, the tribes and all the local casinos,” Kaufmann said. “So the benefit does not outweigh people losing their jobs, in my personal opinion.”
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.
Cedar Rapids casino backers emphasize the $60 million in projected new gaming revenue for the state and the local economic impact that a Cedar Rapids casino would generate.
Kaufmann — who said he has not spoken to Reichman — filed separate legislation Thursday in the House. A five-member subcommittee of Kaufmann and Reps. Sami Scheetz, D-Cedar Rapids; David Jacoby, D-Coralville; Carter Nordman, R-Panora; and Brent Siegrist, R-Council Bluffs, are scheduled to meet Monday afternoon to hear comments on Kaufmann’s bill.
He said he expects to quickly pass it out of committee early next week and get it to the House floor, with the intent of getting it passed by the Senate and to Gov. Kim Reynolds’ desk before the gaming commission is set to make a decision at its Feb. 6 meeting on whether to grant a license for a Linn County casino.
Gov. Kim Reynolds has not publicly indicated where she stands on the issue.
“I have a personal high level of confidence that the governor would consider signing it if we get it done,” Kaufmann said.
Kaufmann’s bill, however, appears retroactive, prohibiting the commission from issuing any new gambling license beyond those currently “operating and licensed to conduct gambling games on January 1, 2025.”
He said he’s had “productive conversations” with Senate lawmakers. “I'm hoping that the pressure builds with action on this,” Kaufmann said of the Senate. “There is a large number of senators I've had conversations with that want to see this happen.”
House Speaker Pat Grassley told reporters Thursday he expects Senate lawmakers will take up the House after it’s passed.
Jacoby, the Coralville Democrat on the subcommittee, said Democrats likely will request a public hearing on the House bill.
He expressed uncertainty about the viability and economic and community impact of a Cedar Rapids casino. Jacoby said he’s received mixed feedback from Linn County residents, with some preferring alternative development ideas over a casino.
He told The Gazette he’s leaning toward again voting for a moratorium, with a preference for a one-year moratorium “and then everyone sit down and agree whether or not the gambling commission has oversight over this or not.”
Growing competition from out of state
Similar to last year’s version and Reichman’s bill, House Study Bill 80 would enact a five-year moratorium on issuing new casino licenses in the state, through June 30, 2030.
Unlike Reichman’s bill, however, it also would spell out 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.
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.
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. Of Iowa’s 19 licensed casinos, that 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. Dan Kehl, chief executive officer of Elite Casino Resorts, long has argued a Cedar Rapids casino would “cannibalize” revenue from existing properties.
Cedar Rapids officials argue Iowa has seen growing competition from neighboring states, and that a Cedar Rapids casino could help Iowa offset losses to Illinois and Nebraska — where Elite has recently built a new casino.
The Iowa Racing and Gaming Commission twice has rejected proposals — in 2014 and 2017 — to bring a casino to Cedar Rapids.
Casino 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.
They also stressed the new studies show higher revenue and lower cannibalization from a Cedar Rapids casino than previous studies, and that the projected impact to existing Iowa casinos also is significantly less than what was projected when the state granted a license for Wild Rose Casino & Resort in Jefferson.
“At the end of the day, the Legislature shouldn’t be in the business of picking winners and losers,” Scheetz told The Gazette. “... We should let the Iowa Racing and Gaming Commission do its job, evaluate the data, and decide what’s best for Iowa instead of tying their hands with this kind of legislation.”
While true that a Cedar Rapids casino would impact the profits of existing casinos, it’s important to consider the new gaming revenue the casino is estimated to create, Scheetz said.
“A Cedar Rapids casino is projected to generate up to $60 million in additional revenue for the state, at a time when we are seeing decreasing gaming revenue statewide,” he said. “If we truly value free markets and competition, we must acknowledge that some disruption to the existing industry is going to be both inevitable and necessary.”
Attendance and revenue at Iowa’s 19 state-regulated casinos dipped slightly for a second consecutive year, according to state data.
Given the overall decline in gambling revenue across the state, Kaufmann called it a “theory” as to how much revenue a Cedar Rapids casino would produce.
“It's certainly a factor, but it doesn't outweigh for me, personally, the cannibalization argument,” he said.
Maya Marchel Hoff of The Gazette-Lee Des Moines Bureau contributed to this report.
Comments: (319) 398-8499; tom.barton@thegazette.com
Daily Newsletters