Iowa lawmakers fast-track casino moratorium bill
Rep. Bobby Kaufmann, R-Wilton, spoke at a subcommittee meeting Jan. 27, 2025 on a proposed casino moratorium that would be in place until 2030. (Photo by Robin Opsahl/Iowa Capital Dispatch)
House lawmakers are moving quickly on the proposed casino moratorium, passing the measure through a subcommittee meeting Monday with plans to consider it at a full Ways and Means Committee meeting later the same day.
House Study Bill 80 would retroactively begin a moratorium on new casinos in Iowa starting Jan. 1, 2025 through June 30, 2030. The legislation would also forbid the Iowa Racing and Gaming Commission (IRGC) from issuing future licenses if a new casino would be projected to impact the adjusted gross receipts of an existing licensed casino by more than 10%, or negatively impact the annual distributions of a qualified sponsoring organization. It also would set an eight-year block on casino applicants from counties where the commission has denied issuance of a license.
The moratorium comes as the IRGC is set to make a decision on granting a casino license to Cedar Crossing Casino and Entertainment Center, a proposed $275 million facility, at its Feb. 6 meeting. While advocates representing the project, Cedar Rapids and Linn County said the casino proposal could bring significant revenue to the local community and state at large, those speaking on behalf of existing casinos said much of the revenue brought in by Cedar Crossing would come at the expense of other casinos.
Rep. Bobby Kaufmann, R-Wilton, had proposed a moratorium in the final hours of the 2024 legislative session that was not considered by the Iowa Senate before adjournment. Kaufmann said last week that he is hopeful the Senate will take up the measure within the short timeframe this year, as the possibility of a new casino in Cedar Rapids is no longer 'hypothetical.'
Kaufmann and speakers representing existing casinos said the Cedar Rapids project could hurt businesses in the state. Frank Chiodo, representing Elite Casino Resorts, the company that owns Riverside Casino and Golf, Rhythm City Casino and Grand Falls Casino, said an estimated 237 jobs would be lost at the Riverside Casino and a $100 million construction project at the Rhythm City casino in Davenport could be on the line if the Cedar Crossing Casino moves forward.
'You have hundreds of millions dollars invested, a bunch of jobs — thousands of jobs — on the line, and we want to change the rules in the middle of the game and wonder why there's concern amongst the industry,' Chiodo said.
He added that he believed it was the Legislature's 'responsibility' to pass a moratorium because of the impacts a new casino would have on the state.
But supporters of the development said the economic benefits a Cedar Rapids casino would bring to the state outweigh the negative effects. Multiple advocates cited recent studies that found Cedar Crossing is projected to bring in $60 million in total statewide commercial gambling revenue, and would take away less business from other casinos than previous proposals showed.
However, the Cedar Crossing project is still projected to have a significant impact on nearby casinos, with a study from Marquette Advisors finding Riverside casino could see a $34 million loss, Meskwaki Bingo Casino Hotel a $14.1 million loss and a drop of $8.8 million at Isle Casino in Waterloo by 2029 due to Cedar Crossing.
Some speakers argued that these projections do not mean lawmakers should halt the project, and said that Iowa lawmakers should allow for competition among casinos. Larry Murphy, speaking on behalf of the city of Cedar Rapids and Linn County Board of Supervisors, said he was a member of the Legislature when the gaming industry was first approved in the state. Since then, he said, gaming has become an established, successful industry in Iowa.
'As you contemplate pros, cons on this bill and this much longer discussion, I would encourage you to realize that at this point you have a very strong industry, and there's nothing in the law or the rules to prohibit the competition where some or all of the existing industry, gaming industry, to change their payoffs so that they're more attractive than the new kids on the block in Cedar Rapids,' Murphy said. '… I think it's not fair for a well-muscled industry to come to you and ask you to interfere with the capitalist system.'
Rep. Sami Scheetz, D-Cedar Rapids, said allowing for more casinos to enter the space — even if it means more competition for existing casinos — would be a net benefit to the state.
'At a time when we're seeing our gaming revenue go down … it's time for some competition that's going to inject new money into the system,' Scheetz said. 'We're going to hear concerns about job losses. In my other job, I represent workers, so I don't take job losses lightly at all. But there is no competition in free markets where people are not displaced. Our job as state legislators is to look at this holistically, to look at the overall market, and to let the Racing and Gaming Commission do its job.'
Kaufmann told reporters last week that arguments about the state casino industry being a free market are a 'fallacy.'
'The Iowa Racing and Gaming Commission is a government body that chooses winners and losers, and the free market does not exist,' he said.
In an interview with Iowa Capital Dispatch last week, Cedar Rapids Mayor Tiffany O'Donnell called for lawmakers to allow the IRGC to consider Cedar Rapids proposal. She said she has 'every faith that they are doing their due diligence and will make the decision to the best of their ability,' and called for the Legislature to allow the process to play out — even if it means that Cedar Rapids could again be denied a license, as happened in 2014 and 2017.
'If the governor and the Legislature decide we're going to have a Iowa Racing and Gaming Commission, they need to be able to do more than decide who gets new carpet and who changes a light bulb at a casino,' O'Donnell said. 'They're in place to make serious — not that those aren't serious decisions — but I mean, they're actually in place to make extremely serious decisions, and this is one of them. And for the Legislature to even threaten to get in the way is incredibly distasteful and disheartening.'
The House Ways and Means Committee will meet at 5 p.m. Monday to discuss amendments and whether to approve the bill for consideration on the House floor. If approved by the committee, the legislation will become available for debate Thursday.
This story is developing and will be updated.
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