House File 2497 is on its way to Gov. Kim Reynold’s desk. If she adds her signature, Linn County residents won’t see a Cedar Rapids casino anytime soon.
HF 2497 calls for a two-year moratorium on new casino licenses. That means all applications could be on hold until at least July 1, 2024.
State senators passed an amended bill on a 35-11 vote on Monday. Then, Iowa House members passed the bill with 60-23 support.
Based on a Nov. 2, 2021, vote, Linn County residents wanted to have a casino in Iowa’s second-largest city. Iowa code requires public support for counties that want to add the option.
- “Public Measure G,” the Linn County gambling referendum, received 24,169 “yes” votes and 54.7% support.
- The measure received 20,036 “no” votes for 45.3% opposition.
- The referendum needed 50% support +1 to pass.
The Linn County election result only meant developers could submit a license application to the Iowa Racing and Gaming Commission (IRGC), however.
The proposal faced headwinds at the IRGC, too. Past members felt a Cedar Rapids project would cast a tall shadow over nearby casinos.
Casino industry at a ‘saturation point?’
State Rep. Bobby Kauffman is the committee chair who helped shepherd HF 2497 through the Iowa House. The omnibus bill eased some regulations for casino operators, added pari-mutuel betting options and expanded the sports-betting menu in Iowa.
Kauffman called the two-year moratorium on casino projects a “compromise” and “pause.” The Wilton Republican told Des Moines bureau reporters:
“I understand both sides of it. But the studies that I have seen, it’s indisputable in my eyes. That casino would cannibalize the nonprofits in many of our areas over in eastern Iowa. We just know. I don’t think even the pro-Cedar Rapids folks would dispute that. They might say that they would use their casino profits to support other charities and I believe that.”
Kauffman said he wanted to protect the non-profits already in place, however. Casinos have to partner with local charities. And, eastern Iowa charities have come to rely on the proceeds from existing casinos.
The IRGC released the findings of a state-commissioned study from The Innovation Group in New Orleans at the start of the year. If Cedar Rapids added a casino, Innovation Group projected:
- A combined 21% decline at the casinos in Riverside and Waterloo.
- Another 5% decline at Marquette and at the two Dubuque casinos.
Cedar Rapids casino united gaming advocates, opponents
Iowa Gaming Association (IGA) President and CEO Wes Ehrecke told PlayIA “several members had advocated for a moratorium,” on new casinos.
Kauffman told reporters the Cedar Rapids decision created some unconventional alliances.
“This becomes to those rare instances where those that have passed pro-casino bills and those that are opposed to gambling — or are conservative members of my caucus on gaming — are on the same page.”
Work was already underway on the Cedar Rapids casino licensing proposal, however. In fact, it might have been an agenda item at the IRGC’s June 2 meeting in Emmetsburg.
With a successful Linn County vote in hand, Peninsula Pacific Entertainment (P2E) would have applied for the gaming license. The development group even lined up a labor agreement for casino construction.