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What’s next for Iowa’s casino moratorium bill?
Will Iowa’s second-largest city finally get its long-awaited casino?
Feb. 4, 2025 5:30 am, Updated: Feb. 4, 2025 1:27 pm
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DES MOINES — Place your bets. Will Iowa’s second-largest city finally get its long-awaited casino?
The Iowa House last week voted 68-31 to pass House File 144 that would retroactively enact a five-year moratorium on issuing new casino licenses in the state from Jan. 1, 2025 through June 30, 2030.
The bill also sets new criteria that the Iowa Racing and Gaming Commission would use to consider future casinos, including whether and how much it would drain revenues from existing gambling facilities in Iowa. The wording effectively prohibits state gambling regulators from ever granting a casino license in Linn County.
An identical bill is winding through the Senate, where its fate is less certain.
“Honestly, I’d say the prospect of a moratorium is basically a jump ball in the Senate,” Senate President Amy Sinclair, R-Allerton, said during a Friday taping of “Iowa Press” on Iowa PBS. “… I don’t know. I’ve tried to do a soft vote count. I can’t honestly tell you where the senate will land.”
Sen. Molly Donahue, D-Marion, said senators were told to keep their schedule clear Wednesday evening in anticipation of potential floor debate on a moratorium bill.
“I think the prospects are pretty high that it’s made it this far,” Donahue said of the Senate debating the bill this week. “… Ultimately, where it comes down to is I don’t think the legislative body should be weighing in on this at this late day when the commission is supposed to make a decision on Thursday. … We should let the commission do their job.”
Senators fast-tracked their own bill, Senate Study Bill 1069, out of subcommittee and the Local Government Committee last Thursday, making it eligible for a floor vote this week. The bill passed the committee 9-3, with support from lawmakers who have casinos in their districts.
The House-passed bill was scheduled for a Tuesday morning hearing before a three-member subcommittee of the Senate State Government Committee.
Should it pass the Senate and Gov. Kim Reynolds signs it into law, the moratorium would disrupt the five-member Iowa Racing and Gaming Commission's planned vote Thursday on whether to grant a license for a planned $275 million casino and entertainment center near downtown Cedar Rapids.
Sinclair, speaking on “Iowa Press,” said she did not believe it was incumbent on the Senate to pass a bill before state gambling regulators meet to vote on the Cedar Rapids casino license, with it being retroactive.
“I think it needs to be a well-vetted conversation,” Sinclair said. “This isn’t a Republican versus Democrat issue. This is an Iowa issue. And the question is, ‘Are there enough casinos in the state or are there not?’ The question is, ‘Should we allow those established boards and commissions to do their jobs that they were created to do or do we not?’
“There are some larger political and philosophical conversations that we’re having along with this that I think need the time to do that. So, we’re going to follow the process and I couldn’t begin to guess where it will end up.”
Reynolds has not said publicly whether she would sign a moratorium. The governor’s office did not respond to a request for comment for this story on Monday.
Law professor: Retroactive moratorium likely would be challenged
Passing a moratorium after the Iowa Racing and Gaming Commission meets raises complicated legal questions, should they grant a license. The likelihood of them doing so, however, is unclear.
The Iowa Racing and Gaming Commission twice has rejected proposals — in 2014 and 2017 — to bring a casino to Cedar Rapids. At the time, commissioners cited concerns that a new facility would siphon off existing customers from current casino properties in Eastern Iowa.
Two market studies ordered by the commission say a proposed Cedar Rapids casino would largely rely on pulling patrons and revenue from other Iowa casinos, but add approximately $60 million in net new gaming revenues to Iowa annually.
Keith Miller, a former Drake University law professor and an expert in gaming law, said the retroactive portion of the law likely would be challenged by casino proponents as unconstitutional, with uncertain results, should lawmaker pass a moratorium after a casino license is granted.
Making a law retroactive, Miller said, is not inherently unconstitutional, but would raise questions as to whether Peninsula Pacific Entertainment (P2E), developer of the proposed Cedar Crossing Casino & Entertainment Center, had a vested right to develop the former Cooper’s Mill site on the city’s northwest side in accordance with state gaming rules in place when its application was submitted.
Kim Pang, vice president of development for P2E, said Monday that it was premature to say whether it would file a lawsuit.
“Our goals is to get the IRGC to make a decision … and not have lawmakers decide on our behalf,” Pang said.
Iowa Racing and Gaming Commission Chair Daryl Olsen said commissioners and IRGC staff are “working diligently to review the volumes of information we have concerning the application and make the best decision possible.
“As I have said in the past, our job is to regulate — not legislate — and we will continue to do our job as best as we can,” Olsen said in a statement to The Gazette.
Tina Eick, Iowa Racing and Gaming Commissioner, likewise told The Gazette that consistent with past practice, the commission established a 209-day process to receive applications, obtain market studies, solicit public comment and conduct site visits.
“In preparation for Thursday’s meeting, the Commission is focused on reviewing all the materials provided and considering established licensing criteria including compliance, safety, gaming integrity, economic impact and development and community support,” Eick said in a statement.
Casino interests donated $350K to Iowa lawmakers in 2024
The state’s existing casinos support a moratorium, saying Iowa’s casino market — with 19 commercial casinos and four tribal casinos — is saturated and that a new facility would “cannibalize” revenues from them.
Casino operators and business, government and nonprofit leaders from Davenport, Dubuque, Waterloo, Cedar Falls, Riverside and the Meskwaki Nation have warned that granting a Linn County casino license would lead to job losses and business closures, and strain local government and nonprofit budgets due to reduced tax and grant revenue from gambling operations.
Opponents, too, argue the city missed its window for a casino.
Linn County voters in 2003 rejected a gaming referendum but later passed two consecutive referendums in 2013 and 2021. The latter permanently authorizes gaming in the county.
The county's initial rejection opened the opportunity for Washington and Black Hawk counties to pass referendums and open Riverside Casino & Golf Resort and Isle Casino Hotel Waterloo. The two properties have invested $150 million in each of their venues, said Iowa Gaming Association president and CEO Mary Earnhardt.
Dan Kehl, chief executive officer of Elite Casino Resorts — which operates casinos in Riverside, Davenport and Larchwood — has been a staunch opponent of a Cedar Rapids gambling facility.
Matt Hinch, a lobbyist representing Elite, said the Linn County market is sufficiently served by Waterloo and Riverside casinos, and that Kehl was pushed to take his business south to Washington County when Cedar Rapids voters rejected the 2003 referendum.
"If Dan Kehl were here today, he would say this is going to have a significant catastrophic impact to his business," Hinch told lawmakers last week.
Cedar Rapids casino backers contend Elite’s expansion into neighboring states cuts into Iowa’s gaming revenues, and that Iowa lawmakers should not continue to shield his properties from competition. Hinch insisted Elite’s facilities in Nebraska and Illinois were not close enough to the Iowa border to threaten Iowa casinos.
Elite PAC — the political arm of Elite Casino Resorts — donated $234,000 to state lawmakers in 2024, according to state campaign finance records.
The largest individual beneficiaries of Elite PAC's donations in 2024 were Rep. Bobby Kaufmann, R-Wilton ($12,304); Rep. Matt Windschitl, R-Missouri Valley ($11,500); House Speaker Pat Grassley, R-New Hartford ($10,000); Senate Majority Leader Jack Whitver, R-Grimes ($10,000); and Sen. Dan Dawson, R-Council Bluffs ($10,000).
Elite PAC also donated $10,000 to the Republican Party of Iowa.
Cedar Rapids Development Group PAC donated $116,000 to state lawmakers in 2024. The group donated $7,500 to Whitver, $6,000 to Iowa Senate President Amy Sinclair, R-Allerton, and $5,000 each to Windschitl, Dawson and Sens. Jason Schultz, R-Schleswig, and Mike Bousselot, R-Ankeny.
Cedar Rapids Development Group PAC received $115,000 in contributions in 2024, including $50,000 each from Natalie Schramm of Dubuque and Jonathan Swain of Bellevue. Both are board members of Cedar Rapids casino developer Peninsula Pacific Entertainment.
Swain also is president of the Cedar Rapids Development Group, a subsidiary of Peninsula Pacific Entertainment.
Video from Tuesday’s subcommittee
Erin Murphy of The Gazette contributed to this report.
Comments: (319) 398-8499; tom.barton@thegazette.com
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