Gambling question on track for November vote in Linn County

CEDAR RAPIDS — Linn County voters should expect to face the question at the polls this November of whether to renew their permission to allow gambling, which would leave the door open for Cedar Rapids to try again to seek authorization from state regulators to build a casino.

The Linn County Board of Supervisors agreed Wednesday to have county staff draft a resolution with language to place the referendum on Nov. 2 ballot — which, if voters approve this question a second time, would permanently authorize gambling in the county if licensed.

Though voter permission is a key step in Cedar Rapids’ casino prospects, the city would need to leap the tall hurdle of securing a license from regulators, who have rejected applications for casinos in the city in 2014 and 2017.

The gambling question will be among many issues on the same ballot as Cedar Rapids metro area elected officials announced last week that they also will seek an extension of the 1-cent local-option sales tax to fund infrastructure work in several communities. Those measures will be on the ballot in addition to local races, including Cedar Rapids mayoral candidates, as well as school board races.

The supervisors also Wednesday authorized staff to draft an ordinance that would lead to the sales tax referendum being on the Nov. 2 ballot in unincorporated Linn County.

Former Supervisor Brent Oleson, who now is the county deputy director of policy and communications, had researched for supervisors the potential implications of the measures being on the same ballot.

He said the resolutions likely will be presented to the supervisors to pass in late June to formally set the November date for the issues to appear on the ballot. That timing is intended to avoid triggering a September election.

“I think that everybody probably agrees that having the most people be able to vote, that would be the November election, so you’re going to have a very active mayor’s race in Cedar Rapids and you’ll have City Council seats up all over Linn County, so that’ll have the most citizen participation,” Oleson said. “They’re both pretty important issues for the economy of Linn County and its cities, so it’ll be good to have the most number of people to weigh in on both measures.”

Stacey Walker, chairman of the Linn County Board of Supervisors, said turnout is historically low during election years in which there are no presidential or congressional candidates on the ballot.

But this year, with a contested race for Cedar Rapids mayor and several City Council seats on the ballot along with the tax and gambling measures, he hoped that could change. It also is more cost-efficient to have the measures on one ballot versus paying for a separate special election, he said.

“This is a big election for our city, and so it just makes sense that we could give the voters all year long to think about these three big issues — of course there will be other issues — and put them all on one ballot,” Walker said. “Hopefully by doing that, that’ll increase voter turnout as well, so that would be a positive byproduct.”

Cedar Rapids Mayor Brad Hart, who is running for reelection with both the sales tax and gambling measures headed toward placement on the Nov. 2 ballot, said about the gambling referendum there is no city action to be taken.

And while it may be difficult to run for election while advocating passage of the local-option sales tax extension — which Cedar Rapids uses for its Paving for Progress street work program — he said “it’s the right time to do it for the city. I’m not going to make a decision that benefits me to the detriment to the city.”

Casino proposal yet to emerge

Hart said local investors will remain involved if a casino proposal moves forward, should voters support permanent authorization of licensed gambling in the county.

Cedar Rapids has a memorandum of understanding through Oct. 9, 2029, with the Cedar Rapids Development Group, which is made up of many mostly local investors. Under the 10-year agreement, the group is paying the city $75,000 a year so the city would exclusively support the group in a casino license application.

Its agreement with the city is not tied to a specific location.

Jonathan Swain, an investor with the group, said in a statement the investors support the supervisors’ plans to place the measure on the November ballot.

“In 2013, an overwhelming majority voted yes to bringing a casino to Linn County,” Swain said. “We remain committed to developing a world-class casino for Cedar Rapids — a promise we will keep through our exclusive agreement with the City Council.”

A potential site would need to be identified if an application is made again. The originally proposed location, at an 8-acre site at First Avenue and First Street SW, is out of the question. The land is now dedicated to a $90 to $100 million proposal for a Big Grove microbrewery, a family fun center and other entertainment venues.

Other variables cast uncertainty

Passage of the gambling referendum is just one step in Cedar Rapids' potential bid to actually land a casino.

The composition of the five-member Iowa Racing and Gaming Commission, which awards gambling licenses, has changed since the appointed panel last shot down the city’s application in 2017.

The term of the only remaining commissioner who has voted against a Cedar Rapids license, Kristine Kramer of New Hampton, expired April 30. Other opponents on the state commission, Jeff Lamberti of Ankeny and Carl Heinrich of Council Bluffs, previously cycled off.

But so did Richard Arnold of Russell and Dolores Mertz of Algona, who both supported a Cedar Rapids license.

The three-year term of Pennie Gonseth-Cheers, a Democrat from Afton, also expired this year.

Gov. Kim Reynolds appointed Mark Campbell, a Democrat from Fort Dodge, to fill one spot. Commission administrator Brian Ohorilko said the panel anticipates a fifth member being appointed but is not aware of a timeline for that.

Officials are also monitoring changes across state lines after Nebraska voters authorized gambling there, which some Iowa casino backers fear could hurt the state’s gaming revenues. The commission at its April meeting directed staff to issue a request for proposals — which it did Monday — to conduct a socioeconomic and market analysis as required every eight years.

This review asks vendors to examine things such as the effect of gambling on employment, bankruptcies and crime rates, Ohorilko said, as well as questions related to the types of facilities and amenities that make sense.

“Part of the data that would be completed as part of the study also will opine on how gambling in other markets is going to impact the Iowa market, and really also will look at just the health of the Iowa gaming market and the health of the facilities that are there and looking at overserved and underserved markets,” Ohorilko said.

The last study was conducted in 2013 and published in 2014 — before Nebraska’s legalization of gambling, before Reynolds in 2019 signed the law legalizing sports betting in Iowa and before Cedar Rapids’ last casino application.

Ohorilko said the timing of the refreshed study along with the potential passage of local referendums, such as the one in Linn County, is good and could make available some information specific to those markets.

A campaign to champion the referendum’s passage has yet to take shape. But when voters last passed the referendum by a 22-point margin, 61 to 39 percent, in March 2013, the vitriolic campaign cost $2.2 million.

Karlyn Ollendick, chief operating officer of Elite Casino Resorts, which operates Riverside Casino and Resort south of Iowa City whose chief executive largely funded the opposition campaign, said in a statement, "We are thankful to our employees and guests for enduring the challenges of the last 14 months. But fundamentally, we don’t believe this gaming market has changed since the last time this question was brought to the Iowa Racing and Gaming Commission."

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