Judge: Cedar Rapids casino can move forward

CEDAR RAPIDS — Developers of a new Cedar Rapids casino are moving “full speed ahead” after a ruling from a district court judge this week affirmed the validity of its state-issued gaming license.

The Iowa Racing and Gaming Commission on Feb. 6 issued the license to Linn County Gaming Association for the Cedar Crossing Casino & Entertainment Center, a $275 million gaming facility proposed for northwest Cedar Rapids near downtown.

The license was swiftly challenged by Riverside Casino & Golf Resort — a Washington County competitor that stands to lose millions if Cedar Crossing opens as planned in late 2026 — and the Washington County Riverboat Foundation, the Riverside casino’s nonprofit affiliate and gaming license holder.

Riverside argued in court documents that the gaming commission did not have the authority to issue the long-sought license, and that it further failed to consider the negative economic impact it would cause to existing Iowa casinos.

The ensuing legal battle was waged through hundreds of pages of legal filings that culminated in oral arguments presented before Eighth Judicial District Judge Michael Schilling last month in Mount Pleasant.

After considering those arguments for over a month, Schilling this week denied Riverside’s claims on all counts.

“The court concludes that the decision to grant a gambling license for a Linn County casino on Feb. 6, 2025, cannot be fairly characterized as an erroneous interpretation of law,” Schilling wrote.

Linn County Gaming Association President Anne Parmley called Schilling’s order the “best possible outcome” for Linn County. Site work continues at the Cedar Rapids construction site, she said, and the casino remains on schedule to open on Dec. 31, 2026.

The project is being completed in partnership with casino developer Cedar Rapids Development Group, a subsidiary of Peninsula Pacific Entertainment (P2E).

“We’re full-speed ahead and from what I understand from P2E we’re still on schedule for New Year’s Eve, 2026,” Parmley said. “We felt that the argument we made on behalf of Linn County was strong, and the judge agreed.”

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Cedar Rapids Mayor Tiffany O’Donnell, a vocal supporter of the Cedar Crossing facility, echoed Parmley’s assessment Thursday and reiterated her excitement to see the project come to life.

As proposed, the facility will include 700 slot machines and 22 table games, as well as an assortment of restaurants, bars and other entertainment amenities that include a STEM lab for kids and a 1,500-person entertainment facility.

Developers have agreed to a minimum assessment of $50 million for the facility — bringing in what it estimates at $2 million a year in local property taxes — and its backers pledged 8 percent of the casino’s annual net adjusted gross revenue to nonprofit organizations.

“This is a huge opportunity for Cedar Rapids,” O’Donnell said. “I couldn’t be more proud of our community for sticking with it … and doing what’s best for our city.”

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Patty Koeler, executive director of the Washington County Riverboat Foundation, declined to comment on the ruling Thursday, saying she would like to discuss the matter with the foundation’s lawyer.

Lawsuit argument hinged on 2021 ballot language

Timely construction of the project was contingent on the outcome of Riverside’s challenge. Much of the Washington County competitor’s case hinged around purported deficiencies in the 2021 ballot referendum that allowed legal gambling in Linn County.

The 2021 ballot was the second time Linn County voters approved legalized gambling 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.

That ballot question, Public Measure G, asked Linn County voters whether legalized gambling “may continue” in the county. At that time, however, no such activity had occurred given the lack of a legal license.

Riverside argued that the discrepancy was significant enough to mislead or confuse Linn County voters and to bring into question whether its passage was legally viable to allow for and inform commissioner’s consideration of the Cedar Crossing proposal.

Upon review, Schilling determined it was legally viable.

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The 2021 vote occurred after extensive media coverage of the issue, he noted, as well as nearly a decade of ongoing community conversations around the potential and desire for a Cedar Rapids casino.

“The petitioners’ argument that voters were misled or confused does not adequately acknowledge the facts connected with the election,” Schilling wrote. “... Rather, the evidence supports the conclusion that voters were not likely confused or misled.”

Schilling ultimately ordered that Riverside had also failed to show that the IRGC had acted in a “unreasonable, arbitrary or capricious” manner in its decision to issue the Linn County license.

Citing the exhaustive agency record, he noted commissioners’ review and discussion of two market studies outlining the potential impacts from the Cedar Crossing facility — both of which projected overall increases to the state gaming market while acknowledging the potential for some cannibalization.

Schilling wrote that commissioners had met their duty in the consideration of necessary circumstances — including cannibalization — and were therefore able to legally issue the Linn County license.

Riverside officials could not immediately be reached for comment Thursday. Per its petition, however, the casino said up to 200 employees could be laid off if the business suffers when a nearby casino opens.

It also asserted nonprofit organizations that receive thousands from the casino each year would lose significant contributions allocated through a partnership with the Washington County Riverboat Foundation.

Kalen McCain of the Southeast Iowa Union contributed to this report.

Comments: grace.nieland@thegazette.com