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Cedar Rapids, Iowa 52401
Cedar Rapids will get its casino license, state board decides; lawsuit likely
The Iowa Racing and Gaming Commission voted 4-1 Thursday to award a license for a Linn County casino
Feb. 6, 2025 9:31 am, Updated: Apr. 23, 2025 11:29 am
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ALTOONA — Cedar Rapids casino backers beat the odds and won big Thursday.
After more than a decade of trying to bring a casino to Linn County, the Iowa Racing and Gaming Commission voted 4-1 to grant a gaming license to build a planned $275 million casino and entertainment center near downtown Cedar Rapids.
A ground breaking is scheduled for 11 a.m. Friday.
A lawsuit, however, is likely.
“Honestly, cataclysmic day for Cedar Rapids and Linn County,” Cedar Rapids Mayor Tiffany O’Donnell told reporters after the vote. “We’ll be moving dirt tomorrow, wasting no time in getting this up and running. Linn County, Cedar Rapids deserves this. It’s only taken us 12 years to get here. Looking forward to a homecoming this afternoon.”
O’Donnell later clarified that she was so excited after the vote, she used the word “cataclysmic” when she meant to say “transformative.”
Casino backers’ long-held dreams to build a gambling facility in Cedar Rapids had been repeatedly thwarted in the past — both by lawmakers and state regulators — over concerns that a new facility would drain or “cannibalize” revenues from existing Iowa casinos.
“This has been a mountain to climb from the beginning,” O’Donnell said. “To say that we were a long shot is an understatement. I have said from the very beginning this was David versus Goliath, and by god the story ended the same way. Let’s hear it for David today. And the Legislature was a prime example of that.”
Iowa House lawmakers last year and this year passed legislation that would have blocked state regulators from issuing new casino licenses, after a two-year moratorium passed in 2022 expired last summer.
But in both cases, the proposal died in the Senate.
Lawmakers tried to block casino vote
The Iowa House last week voted 68-31 to pass House File 144 that would retroactively enact a five-year moratorium on issuing new casino licenses in the state from Jan. 1, 2025 through June 30, 2030.
Sen. Ken Rozenboom, a Republican from Oskaloosa, announced Tuesday afternoon that the bill will not advance in the Iowa Senate this year.
The bill also proposed new 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.
The wording effectively would have prohibited state gambling regulators from granting a casino license in Linn County in the future.
Republican House Speaker Pat Grassley, R-New Hartford, told reporters Thursday he’s not had conversations with lawmakers about reconsidering the moratorium bill in light of Thursday’s decision by state gambling regulators.
“Obviously, would have liked to have seen a different outcome with the bill we sent over to the Senate, but I have not had any further conversations with members since the (IRGC) decision,” Grassley said.
Grassley, though, indicated the conversation could resurface as other Iowa communities seek opportunities to add a casino.
"All of the focus has been on this one, because it was the one before the commission, but I think we have to keep in mind some of the same topics and arguments on why we did what we did could apply if there are other ones across the state," Grassley said.
Rep. Sami Scheetz, D-Cedar Rapids, said in a statement the commission's decision was a win for Cedar Rapids and the whole state.
“This isn’t just about Cedar Rapids — this is about ensuring Iowa remains competitive,” Scheetz said. “Our state does best when we focus on growth and opportunity instead of protecting special interests. The IRGC followed the process, reviewed the data and made the right decision for Iowa’s economy.”
Lawsuit to be filed challenging Linn County casino license
Mark Weinhardt, an attorney for Riverside Casino & Golf Resort, said a lawsuit would be filed Thursday challenging the commission’s decision.
The Iowa Racing and Gaming Commission last month declined to decide whether a 2021 Linn County gambling referendum allows a casino to be built in Cedar Rapids.
The referendum ballot language said gambling "may continue."
Riverside Casino & Golf Resort, which a market study suggests could lose more than $30 million of revenue annually if the Cedar Rapids casino is built, contends that the approval for gambling is invalid because gambling had never begun in the county.
It asked the commission to issue a declaratory order that said it lacks the authority to issue a gambling license in Linn County because of the invalid language. The commission voted 4-1 Jan. 23 to refuse the request. Riverside had 30 days to appeal that refusal to District Court.
“We believe that the 2021 referendum simply asked Linn County voters the wrong question to support the issuance of a gaming license,” Weinhardt told reporters after the IRGC meeting. “The commission did not, under the Iowa Code, have the authority to provide the license it purported to issue today. … Whether the commission is authorized to issue a gaming license in Linn County is after today a question for the courts; not the commission.”
Weinhardt said Riverside Casino and its nonprofit affiliate and gaming license holder also will ask an Iowa District Court to find that the “cannibalization” of surrounding Iowa casinos “is inconsistent with Iowa law.”
“The only reasonable path forward now is for the commission to place the license in suspension and pause all development activities in Cedar Rapids,” he said. “The courts must be allowed to resolve the legal status of this project. We’ve asked the commission to do that today.”
The casino would be built on Cedar Rapids’ northwest side on vacant land that was once the site of a hotel until it was demolished after sustaining damage in the 2008 and 2016 floods.
“The reality is that we had no other options for that site in terms of investment,” said Cedar Rapids City Council member Dale Todd, who represents the area where the casino will be built.
“Nobody was knocking down our door to say they wanted to building anything there, nor did we have anything in the pipeline,” Todd said.
The proposed Cedar Crossing Casino & Entertainment Center would include 700 slot machines, 22 game tables, restaurants, bars, an entertainment venue with a 1,500-person capacity, an arts and cultural center and a STEM lab for children.
IRGC: Iowa gambling market has capacity to support ‘unique’ project
The Iowa Racing and Gaming Commission had twice 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.
Two market studies ordered by the commission say a proposed Cedar Rapids casino would largely rely on pulling patrons and revenue from other Iowa casinos, but add approximately $60 million in net new gaming revenues to Iowa annually.
The state’s existing casinos have supported 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.
Despite concerns about market saturation and cannibalization, commissioners cited the project's economic benefits — including job growth and new tax and gaming revenue — and community support.
Commissioner Julie Andres, a Republican from Okoboji, said the proposed Cedar Rapids casino provides “a unique and differentiated project in the market, and provides a net gain of revenues to our state.”
IRGC member Amy Burkhart, an independent from Burlington, echoed the comments.
“All I see is net gain. I see net gain in terms of tax revenues for our state,” she said, noting state gaming tax revenue would otherwise decline “due to competition in our border states.”
Commissioner Mark Campbell, a Democrat from Otho, said some questioned whether awarding a Cedar Rapids license would "open Pandora's box for gaming in Iowa."
He said he was assured by data presented to the commission that Iowa’s gambling market has the capacity to support the project and that temporary shifts in market share are expected.
“It's important to note that every gaming license issued in Iowa has experienced some degree of cannibalization or market share redistribution, yet the industry continues to thrive," Campbell said. "It's a reality that many licensees were aware of when they applied, fully understanding that temporary shifts might occur. Despite these shifts, Iowa gaming has remained robust and successful.”
Commission member Alan Ostergren, a Republican from Altoona, raised concerns about the validity of the 2021 Linn County gaming referendum and the legal authority of the commission to grant the license. While a “high-quality” project that has garnered community support, Ostergren also cited potential disruption to existing casino operators in the state.
“I personally come down on not disrupting our existing operators to that extent based on that negligible increase in revenue to the state as a whole,” Ostergren said.
Commission chair Daryl Olsen, a Republican from Audubon, said after consulting with commission legal counsel and a representative from the Iowa Attorney General’s Office, “a majority of the commissioners are satisfied that we have the authority to move forward and make this decision.”
‘Rural Iowa lost today’
Casino operators and business, government and nonprofit leaders from Davenport, Dubuque, Waterloo, Cedar Falls, Riverside and the Meskwaki Nation have 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.
“Rural Iowa lost today,” said Rep. Heather Hora, R-Washington. “… I feel sorry for my district. I feel sorry for the nonprofits that are going to lose out, for my schools, for the police department, the fire department — all of the things that benefit from our riverboat foundation. And I simply cannot believe that unelected officials are making decisions that impact Iowa in the way that they do.”
Hora’s district includes Riverside Casino.
Backers said 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 would make the proposed casino more relevant.
Cedar Rapids business and nonprofit leaders and representatives from Iowa State Building and Construction Trades Council, North Central States Regional Council of Carpenters, Master Builders of Iowa and affiliated local unions have said 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.
An economic impact study commissioned by the casino developer projects a Cedar Rapids casino would support 792 construction jobs and employ 365 workers once open. The study also projects an economic impact of $257 million during the construction phase and $183 million in the first year of operations. In total, from construction and the first 10 years of operations, it projects more than $2.25 billion in economic impact.
Casino developer Peninsula Pacific Entertainment and the Linn County Gaming Association also have committed to distributing 8 percent of net adjusted gross revenue, or about $6 million annually, to nonprofit organizations — more than twice the state-mandated minimum. Of that, 10 percent would be distributed to nonprofits in adjacent counties.
An influx of funding from a casino would help nonprofits meet needs and expand services in areas like foster care, homelessness, food insecurity and health care, said Linn County Gaming Association President Anne Parmley.
LGA is the nonprofit affiliate and charitable arm that jointly applied for a casino license with P2E.
When will the casino be built?
Crews plan to break ground Friday at F Avenue NW, which used to host the Best Western Cooper’s Mill hotel until it was demolished after sustaining damage in the 2008 and 2016 floods.
Jonathan Swain, president of Cedar Rapids Development Group — a subsidiary of Peninsula Pacific Entertainment — said the casino is slated to take 18 to 22 months to build.
The facility will include:
- Clubhouse by Zach Johnson: Features locally-sourced steaks and chops, local brews and cocktails, bearing the name of the Cedar Rapids native and PGA Tour golfer
- World's Fare: Features dishes like Indian street tacos, Korean-inspired crispy fried-chicken, Mediterranean wraps
- River's Edge Smokehouse and Tap: Features Iowa Titan Tenderloin, pulled pork, burgers and more
- A 1,500-capacity entertainment venue
- An Arts & Cultural Center and STEM lab
- 1,143 parking spaces
- Free shuttle service to area hotels, downtown, the Kingston Yard Development, and the Czech Village and New Bohemia districts
Swain said this was Cedar Rapids casino backers' best proposal yet.
"It has the most amenities," Swain said. "It's the highest-value proposal. And so I think that the commission looked at that and saw a differentiation from the prior applications that we submitted, and I think that was very important. in them getting to yes."
Comments: (319) 398-8499; tom.barton@thegazette.com
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