A proposed new casino in Cedar Rapids has sparked significant debate in the Iowa legislature, with a bill moving forward that would effectively prevent its development. The bill, which seeks to impose a five-year moratorium on new casino licenses in the state, was passed by the House Ways & Means Committee on Monday evening in a 17-8 vote. This legislation now heads to the full House for further debate, with a vote scheduled for Thursday.

Proposed bill aims to block Cedar Rapids casino and limit new licenses:

The bill, designated as House Study Bill 80, would apply retroactively, blocking new casino licenses in Iowa from January 1, 2025, through June 30, 2030. The timing of this legislation is crucial, as it aims to preempt the Iowa Racing and Gaming Commission’s upcoming decision on whether to grant a license for a proposed Cedar Rapids casino at their February 6 meeting.

Rep. Bobby Kaufmann, a Republican from Wilton and chair of the House Ways & Means Committee expressed concerns about the potential negative economic impact that a new casino could have on his district, which is home to the Riverside Casino & Golf Resort. Kaufmann’s fears center on potential job losses and other detrimental effects to the local economy. “This is about protecting our existing jobs and investments,” Kaufmann said. He emphasized that decisions about new casinos should take into account their effects on other established gambling operations, describing current state laws on the issue as too vague.

The bill sets forth several key criteria for the Iowa Racing and Gaming Commission to consider when reviewing applications for new casinos. According to KCCI, under this proposal, regulators would be prohibited from issuing a license if it would cause existing casinos to lose more than 10% of their adjusted gross receipts. Additionally, if a casino application is rejected, no other applicant from the same county could apply for a license for at least eight years.

This bill also introduces a measure that would limit new licenses in rural counties or counties along the Iowa border if doing so would harm existing casinos. This provision effectively shields casinos in Riverside and Davenport from competition, given their geographic locations. The bill also includes exemptions for the Prairie Meadows and Isle Casino locations, which are considered exceptions to the rule.

Iowa’s gambling industry, already home to 19 commercial casinos and four tribal casinos, is concerned that a new Cedar Rapids facility could lead to a saturation of the market. Two market studies commissioned by the Iowa Racing and Gaming Commission suggest that the proposed Cedar Crossing Casino in Cedar Rapids would siphon substantial revenues from other casinos in the state, including Riverside and Meskwaki Bingo Casino Hotel.

According to one study by Marquette Advisors of Minneapolis, the Cedar Crossing Casino would generate about $118 million in revenue by 2029, with more than half of that amount—$68 million—coming from other Iowa casinos. Another report from The Innovation Group of New Orleans projected similar findings, suggesting that $56 million of the expected $116 million in annual revenues would be diverted from existing facilities.

Despite these concerns, proponents of the Cedar Rapids casino argue that the project would provide significant economic benefits for the area, particularly in the wake of recent disasters like flooding and the 2020 derecho. Cedar Rapids City Council member Ann Poe, speaking in place of Mayor Tiffany O’Donnell, told lawmakers, “Our community continues to fight back from flooding and the derecho, and I cannot understate how important the economic impact from this casino would be on continuing to help us and the state in that recovery.”

Supporters and opponents voice strong arguments:

Supporters of the moratorium, including leaders from Iowa’s existing casinos, argue that the state’s gambling market is already oversaturated and a new casino would harm their operations. Mary Earnhardt, President and CEO of the Iowa Gaming Association, underscored the potential damage by saying, “Simply stated, a moratorium on casino licenses will prevent job losses and business closures.” These advocates highlight the importance of protecting Iowa’s current gaming operations and nonprofit beneficiaries, who rely on casino revenue for funding.

However, others, including Rep. Sami Scheetz, a Democrat from Cedar Rapids, believe the bill interferes with local control and stifles competition. “It’s time for some competition that’s going to inject new money into the system,” Scheetz argued. He opposed the bill both in committee and subcommittee, stressing that lawmakers should allow the Iowa Racing and Gaming Commission to handle decisions based on their expertise, rather than enacting broad legislation.

Scheetz also acknowledged the potential for job losses at existing casinos but argued that new competition could invigorate the gaming industry, which has seen a slight decline in attendance and revenue over the past few years. “Our job as state legislators is to look at this holistically,” Scheetz explained, as The Gazette reports. He pointed to studies suggesting that the Cedar Rapids casino would generate new revenue for the state and create job opportunities for people in Linn County who are currently employed out of state or seeking work.

Local officials, including Rep. Aime Wichtendahl, also weighed in, advocating for the right of Linn County to make its own decisions regarding economic development. “We should control our own destinies,” Wichtendahl said, stressing that the state legislature should not override the will of local voters who passed referendums authorizing gaming in the county.

While the bill is making its way through the legislative process, it faces significant opposition from those who argue it infringes on local autonomy and the potential for new economic opportunities. Linn County Gaming Association president Anne Parmley highlighted that studies show the Cedar Rapids casino would bring millions of dollars to the state and increase charitable contributions to nonprofit organizations by over $4 million annually. Conversely, opponents fear that the new facility would undermine existing casino revenues, potentially leading to widespread job losses.

The Iowa Racing and Gaming Commission, which had previously rejected casino proposals for Cedar Rapids in 2014 and 2017, faces another legal challenge. Riverside Casino & Golf Resort has argued that a 2021 referendum vote that authorized gambling in Linn County was invalid, as gambling had never actually taken place in the county. The commission recently declined to make a ruling on this challenge, with a final decision on the casino license expected soon.