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Legal filings pour in ahead of May hearing in case against proposed Cedar Rapids casino
In a reset hearing, parties meet May 7 in Mount Pleasant for oral arguments
Apr. 20, 2025 6:00 am, Updated: Apr. 23, 2025 11:27 am
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CEDAR RAPIDS — Ahead of a May hearing, supporters of a proposed Cedar Rapids casino are pushing back on a rival gaming facility’s legal fight questioning the wording of the ballot referendum that cleared the way for the Linn County project.
The move is the latest legal volley between those behind the planned Cedar Crossing Casino & Entertainment Center in Cedar Rapids and the Riverside Casino & Golf Resort, a Washington County venue that stands to lose millions if the Linn County facility comes to fruition.
Riverside has challenged the state-issued license that would permit the Cedar Rapids casino, arguing that regulators were precluded from issuing it based on purported deficiencies in the 2021 ballot referendum that allowed legal gambling in Linn County.
Attorneys for the Linn County Gaming Association and others involved in the Cedar Rapids facility counter that Riverside’s challenge is “untimely, legally baseless and motivated by competitive interests.”
Attorneys on all sides will argue their cases May 7 at a hearing in Mount Pleasant, which was chosen by the court to offer a “neutral” location. The hearing initially was set for April 8, but was rescheduled.
Timely construction of the proposed $275 million Cedar Crossing Casino facility is contingent on the case’s conclusion. The proposed facility 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 to be built in northwest Cedar Rapids near downtown.
Linn County backers question Riverside’s standing
After more than a decade of trying to persuade regulators, backers of a Cedar Rapids casino finally won approval Feb. 6 after the Iowa Racing and Gaming Commission voted 4-1 to approve a license for the Linn County Gaming Association.
Riverside Casino & Golf Resort swiftly challenged the move and requested the court to issue a stay on the license. A judge last month declined to put a hold on the license, but ruled that Riverside had “shown a reasonable likelihood of success” in its quest to challenge the 2021 public referendum that was supposed to clear the way for legalized gambling in Linn County.
In recent filings, however, officials behind the Cedar Crossing operation argue Riverside lacks the legal standing to make that claim, or any other included in its initial petition, because of Riverside’s lack of Linn County operations and the time that’s elapsed since the 2021 referendum.
Neither Riverside Casino, nor its parent company Elite Casino Resorts, operate within Linn County or sought a license to do so, attorneys for the operator and Cedar Rapids Development Group’s parent company, Peninsula Pacific Entertainment, note in a filing.
As such, “petitioners claimed injury from (this action) is nothing more than a competitive disadvantage due to the operation of a casino not in their county of operation, but elsewhere in the state,” one filing reads. “... A party’s grievance over a shift in market competition is not a cognizable legal right under Iowa law.”
Further, backers of the Linn County facility argue that the 2021 referendum was “substantially compliant” with state law despite petitioners’ assertion otherwise, and said that the appropriate time to challenge its language has long since passed.
The 2021 ballot was the second time Linn County voters approved legalized gambling to occur in the county. A 2013 approval was set to expire, and the 2021 vote was meant to extend it indefinitely to allow a new casino application to regulators.
But that 2021 question, Public Measure G, asked Linn County voters whether legalized gambling “may continue” in the county. At that time, though, the gaming commission hadn’t issued a license for gambling in Linn County — so how, Riverside asked in its petition, could it continue?
“The ballot measure — which only narrowly passed (with 54% of the vote) — was framed to take advantage of the status quo bias,” Riverside officials argue in more recent filings, referencing “a well-known effect in which voters favor the existing state of affairs over change.”
Riverside bites back at ‘unprincipled, bizarre’ arguments
In his order denying a stay, 8th Judicial District Judge Michael Schilling offered Riverside’s argument preliminary merit, given the potential confusion experienced by voters who may have interpreted the language to imply a gaming facility already was operating within Linn County.
In a Dec. 20 letter to the Iowa Racing and Gaming Commission, the Linn County Attorney’s Office states the verbiage for the referendum was crafted using template language provided from the state:
“This choice of the language made sense and (was) appropriate in context: the previous ballot question (Public Measure A) which had passed in 2013, but no casino yet had been built. Public Measure G acted as a follow-up to ensure the voters “continued” to support gambling games and a casino in Linn County,” the letter states.
Citing that letter, attorneys with the Linn County Gaming Association argue that the referendum’s verbiage was consistent with state law and should be considered within the broader fight for a Linn County facility.
That fight lasted over 10 years, attorneys note, and those efforts had substantial media coverage. Seeing as “voters do not enter a ballot booth having no general knowledge about the community in which they spend the majority of their lives,” the Linn County Gaming Association argued against the idea that voters would have believed there to already be a gaming facility in Linn County.
“Out of the 420 written public comments submitted to the IRGC in favor or in opposition to the Cedar Crossing Casino license, not a single person expressed confusion about the language of Public Measure G or even suggested that others may have been confused by its language,” attorneys wrote.
Still, Riverside officials maintain a gross disconnect exists between the ballot language presented to voters and that which would have actually allowed for a gaming license to be issued. The said the have the right to challenge the matter in court.
Riverside has stated that up to 200 employees could be laid off if the business suffers when a nearby casino opens and asserted that nonprofit organizations that receive thousands from the casino each year would lose significant contributions.
Those potential losses give the Washington County casino standing to challenge the Linn County license, its lawyers state. “The respondents cite no authority for the proposition that competitive injuries stop at county lines,” petitioners state. “That rule would be unprincipled and create bizarre results in Iowa, where counties are very small.”
Cedar Crossing prep work continues
Despite the upcoming hearing, work continues in Cedar Rapids to prepare the proposed casino site for future development.
Developers have agreed to a minimum assessment of $50 million for the project — bringing in what it estimates at $2 million a year in local property taxes. And the backers pledged 8 percent of the casino’s annual net adjusted gross revenue to nonprofit organizations.
The Cedar Rapids City Council this month approved a zoning change for the proposed casino site to adopted a planned unit development — which creates a customized zone that can take into account all aspects of the multiuse development.
That gives the city more say in the project’s design, zoning administrator Seth Gunnerson said, because developers must seek council approval for a final site plan. As such, city officials can make more specific requests for things like landscaping, parking and remediation of light pollution.
A ceremonial groundbreaking took place Feb. 7. To date, Cedar Crossing developers estimate they’ve paid out more than $20 million in design, planning and licensing fees.
In his March order, however, Schilling cautioned developers against relying on a defense that they’ve already begun work, and noted that would not affect his decision making.
“The court notes that the Respondents’ decision to move forward, to begin and continue construction in the face of a lawsuit, is not a factor for the court to consider when evaluating the merits of the Petitioners’ claims,” Schilling wrote. “Nor is a decision to forge ahead with construction a defense to a defective ballot measure.”
Comments: grace.nieland@thegazette.com
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