- The Iowa Racing and Gaming Commission is set to hear arguments regarding a petition aimed at halting the development of a new casino in Cedar Rapids, but will continue its review for a Linn County casino license without interruption.
- Riverside Casino & Golf Resort and its nonprofit affiliate filed a petition challenging the legitimacy of the 2021 public referendum that allowed gambling in Linn County, arguing that the Iowa Racing and Gaming Commission lacks the authority to issue a new casino license because language in the ballot measure was improperly worded.
- The commission unanimously decided to establish a schedule for legal arguments from both sides before its Feb. 6 meeting, where they expect to vote on the Linn County casino license.
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BURLINGTON — Iowa’s state gambling regulators will hear arguments on a petition filed seeking to scuttle efforts to build a new casino in Cedar Rapids, but will not pause its review and decision on granting a Linn County casino license.
The Iowa Racing and Gaming Commission met Thursday morning in Burlington at Catfish Bend Casino.
The commissioners unanimously directed racing and gaming staff to set a briefing schedule and hear arguments on a petition filed by Riverside Casino & Golf Resort and the Washington County Riverboat Foundation, the nonprofit affiliate and gaming license holder for the casino, seeking a declaratory order stating the state gaming commission lacks authority to issue a new license for a Cedar Rapids casino.
The petition challenges the validity of the 2021 public referendum that authorized gambling in Linn County, which could prevent Linn County receiving a casino license.
The petition was filed Nov. 8, and the commission had 30 days to respond under Iowa Code, with options including answering, declining or setting a schedule for further information. Commissioners ultimately agreed to set a schedule for hearing legal arguments from both sides before making a decision.
Additionally, the commissioners rejected a request by Riverside Casino to pause the process on a Linn County casino license while the commission considers the petition. Commissioners cited insufficient grounds and procedural requirements, and stated it’s their intent to hear legal arguments from both sides before its Feb. 6 meeting, when the commission expects to vote on the Linn County license.
“We ultimately have to decide whether the various criteria to issue a license had been done,” Commissioner Alan Ostergren said.
“And so we can’t avoid this question, which is going to have to be decided in one format or another, one time frame or another, and I have the preference of setting a briefing schedule so that we ensure that we give the Linn County folks the full opportunity, if they choose to participate in the process, to present the best legal arguments that they have,” he said.
“And then to allow our petitioner to provide a reply document. There may be other parties who want to submit legal arguments to us.”
Petition claims referendum approving gaming in Linn County is invalid
In 2013 and 2021, Linn County residents passed referendums authorizing gaming in the county. The 2021 vote permanently authorizes gaming in the county.
Des Moines attorney Mark Weinhardt, on behalf of Riverside Casino and its nonprofit affiliate, contends the 2021 ballot measure contained language that failed to comply with Iowa Code.
Weinhardt, in his petition to the state gaming commission, argues the 2021 public measure approved by Linn County voters didn’t authorize the commencement of gambling, but instead simply extended gaming provisions from a 2013 referendum.
The ballot measure stated: “If approved by a majority of voters, operation of gambling games with no wager or loss limits may continue.” The state, though, has never licensed gambling games in Linn County.
“Accordingly, there were no games that the voters could authorize to ‘continue,’ ” the petition states.
“A proposition requiring approval or defeat of the continuation of gambling games is not a proposition that authorizes the origination of gambling games in the county,” according to the petition.
It also argues the public referendum did not seek approval of all gambling games, but rather a subset of them — games “with no wager or loss limits.” Weinhardt, in his filing, argues that does not comply with statutory language that requires voters to approve “gambling games” without any voter-imposed limits.
“And because there has not been compliance with Iowa Code 99F.7, the IRGC is prohibited from issuing any license for gambling games in Linn County,” according to the petition.
Asked why Riverside Casino and its nonprofit affiliate are challenging the validity of the 2021 referendum now, as opposed to when it was approved three years go, he said, “The licensing decision is the appropriate time to talk about whether the license is appropriate and valid.”
Download: Petition for Declaratory Order to IRGC.pdf
Casino supporters: Petition a delay tactic to prevent gambling in Linn County
Anne Parmley is president of the Linn County Gaming Association, the charitable arm of the Cedar Rapids Development Group, the proposed developers of the Cedar Crossing Casino.
Parmley and other backers of the proposed Cedar Rapids casino say the petition is a delay tactic to prevent Linn County from benefiting from a gaming operation, which would support the city and county through taxes and betterment funds, and provide $6.3 million annually to nonprofits.
Parmley, speaking to The Gazette, said she was pleased with the commission’s decision.
“We understand their need and desire to reflect on the information in front of them,” Parmley said. “ … I am confident, personally, that Linn County voters knew exactly what they were voting for and voted to support a second time around gaming in Linn County — and have come out in droves yesterday to explain why it is so important to Linn County to have this opportunity.”
Delaying the commission’s vote, she said, would have given those opposed to the casino more time to push through legislation to reimpose a ban on new casino licenses in the state. Some lawmakers have said they intend to file a casino moratorium bill that would block new gaming licenses when the Iowa Legislature convenes Jan. 13.
Iowa lawmakers in 2022 passed a two-year moratorium blocking new gaming licenses but failed to extend the pause this year before the legislative session adjourned in April.
The Iowa Racing and Gaming Commission is scheduled to vote on whether to approve the Cedar Crossing Casino in early February, giving lawmakers little time — roughly 18 days — to pass and have Gov. Kim Reynolds sign the moratorium before the racing and gaming commissioner plan to vote on a Cedar Rapids casino license.
C.R. mayor: Give us a ‘fair shot’ at opening a casino
Gaming commissioners heard from more than 100 speakers on Wednesday voice their support and opposition to a Linn County casino license during a public hearing in Cedar Rapids. Most spoke in favor of the casino.
Opponents warned a new facility would cannibalize revenues from other Iowa casinos and dilute, not increase, the state’s gambling market. Casino operators and business, government and nonprofit leaders from Davenport, Dubuque, Waterloo, Cedar Falls, Riverside and the Meskwaki Nation said Iowa’s gaming market is saturated.
Wes Ehrecke, president of the Iowa Gaming Association — which represents Iowa’s 19 licensed casinos — said all the Iowa casinos support a moratorium on new casino licenses in the state.
Supporters, including local nonprofits, businesses and union members, argued that the proposed casino would boost the local economy, create jobs, support community projects and enhance the quality of life by attracting more tourists and providing more entertainment options.
Iowans for Common Sense, which promotes itself as a grassroots coalition, has launched a campaign asking Iowans to oppose the casino, inviting residents to sign a petition supporting a statewide moratorium on new casinos.
Cedar Rapids Mayor Tiffany O’Donnell questioned the grassroots nature of the effort and suspects Iowa casino operators are behind it.
“This is a well-funded campaign that is, really, not surprisingly backed very well by rich casino operators playing out their case against what they call cannibalization,” O’Donnell told state gaming commissioners Wednesday during a site visit to the proposed Cedar Rapids casino location. “The rest of us call it competition.”
O’Donnell on Wednesday asked the commissioners for a “fair shot” at opening a casino, arguing Linn County residents “want this,” as evidenced by their passage of gambling referendums in 2013 and 2021.
Comments: (319) 398-8499; tom.barton@thegazette.com
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