Iowa Gov. Branstad, Hatch differ on gaming regulation

DES MOINES - Gov. Terry Branstad is taking a status-quo view of state gaming regulation, while state Sen. Jack Hatch - his 2014 Democratic opponent - wants market forces to guide future casino licensure decisions in Iowa.

Divergent views on gambling regulation emerged from Thursday's first gubernatorial debate between Branstad, a five-term Republican seeking re-election, and Hatch, a three-term legislator who served in the Iowa House when casino gaming got its start in the state.

Branstad said he would defer decisions on issuing any more state casino gambling licenses to the state Racing and Gaming Commission, which determined last month that it would not welcome new license applications for the next three years. That followed a 4-1 vote in April to turn down a state gaming license for a $174 million casino project in Cedar Rapids. Commissioners declared Iowa's gaming market was all-but saturated and that a Cedar Rapids casino would 'cannibalize” nearby casinos.

Hatch said he is not suggesting how the commission should handle licensing matters but he expressed concern that the panel used 'a reason and rationale that is not in the statute” in looking at 'cannibalization” and the preservation and protection of existing casinos' profits in deciding license applications and casino locations.

'That is being interpreted by the chairman of the gaming commission. That's beyond his authority. My chairman would not have that,” Hatch told reporters after the hourlong televised debate.

'I would let the market decide,” Hatch said in response to a debate question about the placement of new casinos in the state. 'We shouldn't be picking winners and losers, and there's nothing in the state statute that says we have to protect the other casinos.”

Branstad said he believed 'it would be wrong for there to be political interference” in the commission's handling of licensure issues.

But Hatch said casinos comprise the only industry where state government 'interferes with the market” and makes decisions about licenses and locations with an eye on protecting the profits of existing enterprises.

'That should not be state government's job. For a governor to interfere with the market and protect existing business is an anomaly for a Republican governor,” Hatch told reporters after the event. 'He's got himself in a pretty big mess now. We have people in Linn County questioning the integrity of our commission under his authority.”

Regardless of who gets elected governor in November, the gambling licensure issue may resurface in Iowa's political process given that Cedar Rapids Mayor Ron Corbett, a former Iowa House speaker who hasn't always see eye-to-eye with fellow Republican Branstad, has indicated he hopes to build a legislative coalition that would support a broad 'gaming reform” initiative in the 2015 session.

Corbett is proposing Iowa's first smoke-free casino be located in Cedar Rapids as part of a reform package that also would double to $21.8 million a year the amount of state casino tax revenue that goes back to the 84 of 99 Iowa counties without casinos and to their not-for-profit organizations and would eliminate the $22 million annual tax that casinos must pay on free-play promotions

The Corbett proposal also would establish a 10-year moratorium on new casino licenses once a license is granted to a smoke-free casino in Cedar Rapids and perhaps one other spot in the state.