Future of a Cedar Rapids casino heads to the Iowa Legislature

CEDAR RAPIDS - State Sens. Wally Horn and Dan Zumbach told a news conference on Tuesday morning that they will co-sponsor gaming reform legislation for Iowa which will include an experiment - Iowa's first smoke-free casino in Cedar Rapids.

Horn, D-Cedar Rapids, said he will push the gaming reform bill because it will promote economic development in Cedar Rapids, will create jobs and will make a smoke-free casino in Cedar Rapids healthier for customers and workers.

Zumbach, R-Ryan, said he represents 30 small towns in Linn and Delaware counties and the farmers in between and that Little League teams and fire departments will benefit from casino profits that will go to area non-profit groups if there is a casino in Cedar Rapids.

Horn, the longest-serving member of the Iowa Legislature and former Senate majority leader, said the biggest impediment to the gaming reform legislation will come from legislators from the 15 Iowa counties with casinos, which include big counties like Polk, Scott, Dubuque, Woodbury and Pottawattamie with large legislative delegations.

'I think our chances are very good except we have one problem, and that's the other casinos being selfish and not wanting us to have one in Cedar Rapids,” Horn said. 'They fought the same battle to put another casino in the state, and then when they got it, then they turned the opposite direction.

'They're going to have money,” he added. 'Casinos have a lot of money. And so with that and selfishness as far as letting Cedar Rapids have one, that's our big problem.”

Wes Ehrecke, president and chief executive officer of the Iowa casino industry's Iowa Gaming Association, said Tuesday that the state's casinos will fight any gaming legislation that shifts the authority to grant state gaming licenses from the Iowa Racing and Gaming Commission - which turned down a gaming license in April for a casino in Cedar Rapids - to the Iowa Legislature.

'We think that the Iowa Racing and Gaming Commission should be the deliberative body that does that thorough analysis that determines approval of casino licenses,” Ehrecke said. 'And I think this (proposed legislation) would be unchartered precedence to usurp their regulatory authority.”

Dan Kehl, chief executive officer at the Riverside Casino and Golf Resort with ownership interest in the Davenport and Larchwood casinos, on Tuesday said the Horn-Zumbach proposal is a 'gaming expansion bill” masquerading as a gaming reform package.

'There is no need to circumvent the IRGC's authority and history of doing what's best for the state,” Kehl said.

Zumbach said passing any piece of legislation takes work. He said the chances of passing gaming reform legislation is better than zero percent and less than 100 percent.

'It's going to take some meticulous work in the wording and the presentation of what this really is,” Zumbach said.

He said the gaming reform legislation includes a provision that will distribute more gaming revenue to the 84 of Iowa's 99 counties that do not now host a casino as well as a provision that benefits host counties and their non-profit groups by eliminating a state tax on free-play promotions to attract customers to casinos.

'I think an accurate presentation is that this is a different animal than what we've had in the past,” Zumbach said. 'We're going to distribute the funding differently. We're going to have a smoke-free, and so it's not your traditional casino.

'So when we've had a law that's been in place for 25 years on the dynamics of casinos, and now we're looking at something new, that's a good door to open up and force us to look at. Do we need a different animal on the block? And I think we do.”

The proposed legislation represents the gaming reform proposal that Cedar Rapids Mayor Ron Corbett floated in recent months after the Iowa Racing and Gaming Commission turned down a state license for the proposed Cedar Crossing Casino across the Cedar River from downtown Cedar Rapids.

At the Tuesday morning news conference at the Cedar Rapids Metro Economic Alliance, Corbett said Jeff Lamberti, chairman of the state commission, encouraged supporters of the Cedar Rapids casino to seek help from the Iowa Legislature, and Corbett said the legislative proposal is just that.

Afterward, he said the legislation seeks to better balance the distribution of casino revenue and will benefit every county in Iowa, not just Cedar Rapids and Linn County. Iowa's lawmakers 'are always open to issues of fairness,” he said.

At the same time, Corbett said existing casinos and the state commission have made some 'valid points” about the amount of gaming in Iowa. As a result, he said the proposed legislation includes a provision to impose a 10-year moratorium on new casinos in Iowa - after the smoke-free casino in Cedar Rapids secures a state gaming license.

The moratorium will give existing casinos 10 years to invest in their properties to make them more attractive to customers, he said.

Rep. Todd Taylor, D-Cedar Rapids, said he will introduce companion legislation in the Iowa House to the Horn-Zumbach bill in the Iowa Senate.

Taylor said gaming is not a partisan issue. He said the Iowa House bill will be the same as the Senate bill and is designed with features to try to build a coalition sufficient to pass the legislation.

Gary Streit, a Cedar Rapids attorney who has served as a volunteer with the American Cancer Society for nearly 40 years, said he has fought in the past to ban smoking on the gaming floors of Iowa's casinos, and he said he will push again in the upcoming session for smoke-free casinos. He said a smoke-free Cedar Rapids casino is 'a start on the right road” if lawmakers still aren't willing to eliminate smoking from all of the state's casino venues.

Drew Skogman, one of the leaders of the proposed Cedar Crossing Casino investor group, attended Tuesday's news conference, and afterward said the investor group still wants to build its casino across the Cedar River from downtown Cedar Rapids.

The legislative proposal has a provision for the Cedar Rapids casino investors, too. It waives the one-time, $20-million state casino license fee in trade for casino investors taking the risk of opening the state's first smoke-free casino.

At Tuesday's news conference, Sen. Horn said he managed Iowa's initial gaming bill in the Iowa Senate and initially could not get the necessary 26 votes for approval. At the time, Bob Kehl, who operated cruise boats in Dubuque, opposed the gaming bill and sent a flower to every state senator who opposed Horn's effort, Horn said.

In the end, Horn got the votes, and he said Kehl was the first person in line to convert one of his dinner boats into an early gaming boat.

Kehl is the father of Dan Kehl, the Iowa casino owner who has fought hardest against a Cedar Rapids casino because it would be closest to Kehl's casino in Riverside.