Cedar Rapids casino plan gets new life as Iowa Senate derails gambling moratorium bill

Posted by author February 4, 2025 Gambling

Spread the love

In a surprise move, the Iowa Senate will not roll the dice on a five-year moratorium halting new gaming licenses, clearing a hurdle for state regulators to decide the city of Cedar Rapids’ bid for a casino.

An Iowa Senate committee on Tuesday declined to push forward legislation supported by a majority of the House that would have blocked the Iowa Racing and Gaming Commission from approving new gaming licenses through June 30, 2030.

The moratorium would have thwarted the gaming commission’s Thursday vote on awarding a gaming license to Linn County casino-backers.

“I am no fan of gambling, and my decision not to advance this legislation should not be considered in support of casino expansion,” said Sen. Ken Rozenboom, R-Oskaloosa, chair of the State Government Committee. “According to my conversations, this bill did not have enough support from Senate Republicans to advance all the way through the Senate process. In the interest of moving this session forward to other issues of critical importance to Iowans, I have no plans to reconsider the legislation for the remainder of this session.”

Iowa House lawmakers voted 68-31 with bipartisan support last week to pass its version of the moratorium, House File 144, before the clock ran out to stop the gaming commission’s vote.

Gambling issues typically don’t fall neatly along party lines as lawmakers with casinos in or near their districts look to shield jobs and investments in their brick-and-mortar gambling facilities.

Tuesday’s move to decline advancing the bill in the Senate may come as a surprise to House lawmakers who anticipated the Senate would at least consider the casino moratorium.

In January, House Speaker Pat Grassley, R-New Hartford, said if the chamber sent a bill to the Senate, his expectation was that it “wouldn’t be us just passing a bill and it was dead on arrival.”

The Senate adjourned the 2024 legislative session without taking up a proposed moratorium that also passed in the House and would have extended a two-year pause on new gaming licenses that was in place at the time. Without Senate action, that pause expired July 1, 2024.

Moratorium has been a ‘jump ball’ in the Senate

The Senate Local Government Committee passed a version of the moratorium, Senate Study Bill 1069, 9-3 last week, but Senate President Amy Sinclair, R-Allerton, said Friday on Iowa Press it had to go through the State Government Committee because a state casino moratorium is “not a local government issue.”

She called the issue a “jump ball” in the Senate and said she didn’t know where the whole chamber fell on a moratorium.

“I think it needs to be a well-vetted conversation,” Sinclair said. “This isn’t a Republican versus Democrat issue. This is an Iowa issue. And the question is, are there enough casinos in the state or are there not? The question is, should we allow those established boards and commissions to do their jobs that they were created to do or do we not?”

Sen. Tony Bisignano, D-Des Moines, said in a subcommittee that advanced the bill Tuesday morning he rejected the argument that it’s not the Legislature’s role to intervene in a commission decision.

“The Legislature is our place to do everything we want,” Bisignano said. “That’s true. Sounds cold, but we can do whatever we want to anybody. I agree with some and I’ve not agreed with others when we step into the local issues …”

Cedar Rapids’ gaming license slated to be considered Thursday

The Linn County Gaming Association, a nonprofit that would divvy up a slice of Cedar Rapids casino revenue to area nonprofits, and Peninsula Pacific Entertainment, the proposed operator, jointly applied to the Iowa Racing and Gaming Commission for a gaming license.

Their pitch for the $275 million Cedar Crossing casino in northwest Cedar Rapids, near downtown, is the sole application coming before the commission.

If approved, the casino would sit on land that has sat vacant since a hotel was demolished after the 2008 flood. Cedar Rapids casino proponents say it is part of the city’s recovery from the disaster that wiped out much of downtown and the area west of the Cedar River.

“I’m really hopeful that the commission will see the overall economic development opportunity we have with this project,” Cedar Rapids Mayor Tiffany O’Donnell said. “It does have a casino in the facility, and it’s a $275 million entertainment venue that will bring new life to a part of Cedar Rapids’ downtown that was decimated in the floods of ’08.”

While Cedar Rapids casino backers have long sought a gaming license, they’ve faced a tall hurdle to get it through state regulators. The commission twice denied a license in 2014 and 2017 because projections show a Linn County casino would “cannibalize” revenue from existing properties.

Studies commissioned by state regulators show a Cedar Rapids casino would take much of its revenue from existing facilities but add approximately $60 million in net new commercial gaming revenues to Iowa annually.

Asked if senators would revisit the moratorium after state regulators vote on a Linn County license, Rozenboom said there was no path forward for a legislative moratorium, but lawmakers might be receptive to setting stronger criteria for the commission to use in awarding new licenses.

“Should we consider or reconsider what are those guidelines that the commission needs to consider? That’s a fair question, and in subsequent years, perhaps we’ll deal with that,” Rozenboom said. “But no, not a moratorium.”

Petition challenging Linn County referendum could still throw wrench in process

While the Senate’s move clears the path for the Linn County gaming license to go to the Iowa Racing and Gaming Commission, another last-minute wrinkle could be thrown in the commission’s vote.

State regulators last week denied a petition seeking to halt the process of considering a Linn County gaming license application, but the petitioners could still file an appeal on the ruling in Polk County District Court.

Riverside Casino and the Washington County Riverboat Foundation filed the petition for declaratory order in November.

Cedar Rapids casino opponents sought to challenge the effectiveness of the 2021 ballot referendum that came before Linn County voters asking to authorize gaming. This was the second referendum voters approved, allowing the county to seek a gaming license from state regulators in perpetuity without bringing the question before voters again.

Patty Koller, executive director of the Washington County Riverboat Foundation, told the Des Moines Register Tuesday morning the petitioners had not decided whether to file an appeal pending legislative action.

“We’re here hoping the Legislature will take care of this,” she said. “… We have to see what happens first, and then we’ll decide how quickly we have to move forward.”

She told the Senate State Government subcommittee the prospect of a Cedar Rapids casino threatens the livelihood of her rural county.

“It needs to stop, and only you senators can do it,” Koller said.

Marissa Payne covers the Iowa Statehouse and politics for the Register. Reach her by email at mjpayne@registermedia.com. Follow her on X, formerly known as Twitter, at @marissajpayne.