The Casino Question

I've heard the question many times amid big debates over city projects, spending plans, the sales tax and flood protection.

It came again from a reader last week. Why doesn't Cedar Rapids get a casino? We could use the money. Other cities are raking it in. There's a bus that leaves Sam's Club every Wednesday bound for Meskwaki. Where's ours?

The short answer is that Cedar Rapids doesn't have a casino because Cedar Rapids didn't want one. And it likely will never have one because existing casinos won't let it happen.

In November 2003, Linn County voters defeated a gambling referendum 53 percent to 47 percent. The city of Cedar Rapids was of two minds. On the west side, 19 of 21 precincts approved the referendum, some by wide margins. On the east side, it failed in 22 of 26 precincts.

It's been nearly eight years since that vote, so Linn County could try again as early as this fall. But even if it passed, there's no chance a local casino could get a license from the state Racing and Gaming Commission.

The commission gave a license to Lyon County last year, and made it clear that it would be at least three to five years before it would consider another application. And three to five years basically means never. Iowa has 18 state-licensed casinos now, which pour hundreds of millions of dollars of tax revenue into the state treasury.

The last thing the commission wants is for competition to wing any of the golden geese. So if Cedar Rapids did try for a license, the cartel, especially the seven casinos within 100 miles of here, would circle the wagons.

Iowa's casinos did see a collective revenue increase in fiscal year 2011, pulling in $1.38 billion. Most of the handful of casinos that saw less revenue were facilities that did not make new capital investments, expand, add amenities, etc. In the real world, a new venture in Cedar Rapids could create a good business plan, get a license, open and grab business from those stagnant joints. In the world of the cartel, those businesses are shielded from new competition. They got theirs. You get lost.

And Gov. Terry Branstad has made it clear he's against expansion. He appoints the commission.

But don't despair, because, really, a casino is no panacea. Even very rosy projections in 2003 for a $100 million annual take for a casino here meant about $6.6 million for the city and non-profits. That's not pencil dust, but it's hardly the answer to all of our civic prayers. The local-option sales tax, by comparison, brings in nearly $20 million. Other cities did use gaming dollars to leverage big grants from Vision Iowa, but that boat has sailed.

Still, there is one way the city could cash in on gambling, with better odds. Buy a Powerball ticket.

Comments: (319) 398-8452; todd.dorman@sourcemedia.net