Cedar Rapids casino backers undeterred by possible moratorium

Iowa lawmakers may quickly consider a moratorium halting new casinos at the start of the legislative session in 2025, potentially thwarting Cedar Rapids’ third bid for a gambling facility just weeks before state regulators are slated to vote on awarding a gaming license.

But local casino backers say they remain focused on the process of obtaining a gaming license from the five-member Iowa Racing and Gaming Commission, which is scheduled to decide the fate of a Cedar Rapids casino license Feb. 6, 2025.

Commissioners have twice rejected offers by Linn County gaming interests for a state license — in 2014 and 2017.

Iowa lawmakers in 2022 passed a two-year moratorium blocking new licenses, halting Cedar Rapids’ third attempt. The commission in 2022 had decided to take applications for a Linn County license, but stopped the process when the legislative pause took effect.

Legislators this year declined to extend the pause when the Senate didn’t take up Rep. Bobby Kaufmann’s moratorium measure before the legislative session adjourned in April.

Kaufmann, R-Wilton, told the Iowa Capital Dispatch he plans to again introduce a moratorium bill in the 2025 legislative session — before the state gaming commission makes a decision on the Cedar Rapids’ application.

“I did not offer the amendment last (session) to have it pass the House just to abandon my efforts, so I certainly plan to reintroduce it,” Kaufmann told the Capital Dispatch.

Kaufmann didn’t respond to calls from The Gazette, so it’s unknown if he plans to seek another two-year pause or something more long term, like the five-year pause he proposed in April, or a permanent moratorium.

Application proceeds

The Iowa Racing and Gaming Commission is seeking a vendor to conduct a market study assessing how a Linn County casino would impact Iowa’s gaming industry.

The Linn County Gaming Association and the city’s preferred potential casino operator, Peninsula Pacific Entertainment, have said they are prepared to jointly apply in the coming weeks for a gaming license for a Cedar Rapids casino.

The city has had a long-standing deal with the Cedar Rapids Development Group — an entity of mostly local investors — guaranteeing its exclusive support in the licensing process.

That, however, doesn’t preclude others from seeking a license, but it’s unknown if other developers plan to apply. As of Wednesday, the commission confirmed it has not yet received any applications.

The casino development team last year secured a deal with the Cedar Rapids City Council to earmark city-owned property between F and I Avenue NW and First and Fifth Streets NW for Cedar Crossing Casino, a gaming and entertainment complex estimated to cost $275 million.

The land was formerly the home of Cooper’s Mill, a motel and restaurant destroyed in the 2008 flood and later demolished.

“Peninsula Pacific Entertainment and the Linn County Gaming Association are focused on the timeline that has been set by the Iowa Racing and Gaming Commission, which is taking thoughtful steps in considering new gaming license applications for Linn County,” said Kim Pang, vice president of development with Peninsula Pacific Entertainment.

“We are thankful for the opportunity to submit our application for a world-class gaming facility that Linn County has long deserved.”

Pang touted the casino’s plans to give annual nonprofits $5 million to $7 million — the highest nonprofit revenue sharing arrangement in the state.

Plus, he noted, Linn County voters have twice passed gaming referendums, allowing casino interests to seek a license in perpetuity. Casino backers don’t need to bring the matter before voters again.

City priority

  Buy Photo

Cedar Rapids City Manager Jeff Pomeranz said lawmakers would have to move quickly to pass a casino moratorium so early in the session.

City lobbyists and Cedar Rapids casino supporters “have every intention of making it known that this is an important priority to the city of Cedar Rapids,” he said.

“We think it's vital to continue to develop our economy, and this was one important piece of our future economy,” Pomeranz said. “And so we’re not going to give up. We’ll do what we do, but ultimately, there is a process that’s been set up by the state, and we respect that.”

Pomeranz said the city is focused on working with the commission throughout the licensing process.

“Hopefully, the Legislature, from my perspective, will allow that process to work and allow them to gather the information, do the analysis that’s independent, and then consider local conditions and statewide conditions and come back with an answer, with their approval or disapproval,” Pomeranz said.

Mayor Tiffany O’Donnell said of Kaufmann that “it's important to note where he lives and what he represents.”

Kaufmann represents House District 82 in southeastern Iowa, which doesn’t include any state-licensed casinos but is near casinos operated by Cedar Rapids casino opponent Dan Kehl, chief executive officer of Elite Casino Resorts. The company operates casinos in Riverside and Davenport, both just outside Kaufmann’s district.

Local gaming interests argue state lawmakers shouldn’t protect the investments of opponents like Kehl, who are now expanding their operations in neighboring states where the expansions threaten Iowa revenues.

Kehl’s political action committee, Elite PAC, has funneled $588,187 to Iowa candidates, officeholders and both major political parties since 2016, state records show.

Cedar Rapids casino backers have made $202,250 in political donations since they formed the Cedar Rapids Development Group PAC in 2022. The Elite PAC has contributed slightly more than the local group — $216,208 — to Iowa politicians since the Cedar Rapids PAC’s creation.

In that time period, the Cedar Rapids PAC donated $32,500 to Gov. Kim Reynolds’ campaign. Elite PAC contributed $5,000 to Reynolds’ campaign.

Would a moratorium be signed into law?

When considering a legislative pause on new gaming licenses in 2022 and in April, the House supported the measure both times. In 2022, the moratorium passed as an amendment to a larger state gambling regulation bill.

This year, the House in a 71-21 vote in April attached the moratorium amendment to a Department of Revenue policy bill. The Senate, where the moratorium’s fate was less certain, adjourned without taking up the House’s last-minute amendment.

It may be more difficult to pass a moratorium as a stand-alone bill in the first weeks of the 2025 legislative session, leaving a short time to rally enough Senate support to pass the measure.

  Buy Photo

Sen. Jason Schultz, R-Schleswig, chairman of the Senate State Government Committee, said in a statement, “I have not given an extension of the casino moratorium much thought since the session ended. If the issue comes up again next session, our caucus will have a conversation about it at that time.”

If a moratorium is passed, it will be up to Reynolds whether or not to sign it into law. Reynolds’ office didn’t respond to requests for comment.

Erin Murphy of The Gazette contributed to this article

Comments: (319) 398-8494; marissa.payne@thegazette.com