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DES MOINES — Bills to create a five-year moratorium on new state-licensed casinos in Iowa have been introduced by Republicans in both chambers of the Iowa Legislature.
The legislation could potentially thwart Cedar Rapids casino backers’ hopes for a new $275 million facility.
Sen. Jeff Reichman, a Republican from Montrose, introduced a bill Wednesday — Senate File 76 — that would impose a five-year moratorium on new gambling licenses in Iowa. If enacted, it would prohibit issuing new casino licenses in the state through June 30, 2030.
Lobbyists for the Master Builders of Iowa and Cedar Rapids Development Group, LLC — a subsidiary of casino developer Peninsula Pacific Entertainment, which is proposing to build Cedar Crossing Casino in Cedar Rapids — have registered against the bill.
Rep. Bobby Kaufmann, R-Wilton, chair of the House tax policy Ways and Means Committee, filed separate legislation in the House on Thursday.
House Study Bill 80 largely mirrors one that quickly passed the Iowa House with bipartisan support in the waning, early morning hours on the last day of the 2024 legislative session. The Iowa Senate, however, adjourned without taking up the measure.
Similar to last year’s version and Reichman’s bill, Kaufmann’s House bill would enact a five-year moratorium on issuing new casino licenses in the state, through June 30, 2030.
Unlike Reichman’s bill, however, it also would spell out 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 legislation comes as the Iowa Racing and Gaming Commission meets today in Jefferson to consider a petition from Riverside Casino & Golf Resort and Washington County Riverboat Foundation seeking to disqualify a Cedar Rapids casino by challenging the validity of the 2021 public referendum that authorized gambling in Linn County.
The five-member gaming commission is set to make a decision at its Feb. 6 meeting on whether to grant a license for a Linn County casino.
The Iowa Racing and Gaming Commission twice has rejected proposals — in 2014 and 2017 — to bring a casino to Cedar Rapids.
The state later implemented a two-year moratorium on new gaming licenses. That moratorium expired July 1, 2024, allowing Cedar Rapids casino backers to move ahead with their third attempt at securing a Linn County gaming license.
Kaufmann pointed to two new market studies commissioned by the gaming commission that say a proposed Cedar Rapids casino would largely rely on pulling patrons from other Iowa casinos rather than bringing in new customers or significantly increasing statewide gaming revenue.
A moratorium, Kaufmann said, is needed to prevent job losses, business closures and strain on local government and nonprofit budgets due to reduced tax and grant revenue from existing casinos.
“My personal district in Cedar County employs hundreds of individuals at Riverside. I know that many people in this room have constituents employed by Waterloo, Dubuque, Quad Cities, the tribes and all the local casinos,” Kaufmann said. “So the benefit does not outweigh people losing their jobs, in my personal opinion.”
The state’s existing casinos support a moratorium, saying Iowa’s casino market — with 19 commercial casinos and four tribal casinos spread across the state — is saturated and that a new facility would cannibalize revenues from other Iowa casinos and dilute the state’s gambling market.
Casino backers say the state’s second-largest city should be allowed to benefit from gaming the same as other communities, and that growth in Iowa’s gaming industry and competition from neighboring states could make the proposed Cedar Crossing Casino more relevant.
Cedar Rapids officials also emphasize the $60 million in projected new gaming revenue for the state that a Cedar Rapids casino would generate. They also stressed the new studies show higher revenue and lower cannibalization from a Cedar Rapids casino than previous studies, and that the projected impact to existing Iowa casinos also is significantly less than what was projected when the state granted a license for Wild Rose Hotel & Casino in Jefferson. Further, they contend the cannibalization projections were overestimated, and new casinos force others to improve their offerings.
“All we’re asking for is a fair shot,” Cedar Rapids Mayor Tiffany O’Donnell told The Gazette last week, after meeting with lawmakers on the issue.
“We’re just asking the Legislature to get out of the way and let the process take place as intended,” O’Donnell said. “… Like the rest of business, we need to always be looking for ways to innovate rather than leaning on politics to protect (casino) coffers.”
Attendance and revenue at Iowa’s 19 state-regulated casinos dipped slightly for a second consecutive year, according to state gaming data.
“I believe that you are seeing an overall decline in gambling revenue, so the state’s already seeing less money,” Kaufmann said, calling it a “theory” as to how much revenue a Cedar Rapids casino will produce.
“And within those revenue streams, how much of it will be simply replacing … revenue that already is here?” he continued. “And I think that’s a big factor that’s unknown. It’s certainly a factor, but it doesn’t outweigh for me, personally, the cannibalization argument.”
Comments: (319) 398-8499; tom.barton@thegazette.com
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