IRGC declines to consider petition seeking to block Cedar Rapids casino

Decision clears way for IRGC to decide Feb. 6 whether to issue a Cedar Rapids casino license

Cedar Rapids casino supporters petition
Representatives and supporters of a Linn County casino development listen to discussion Thursday, Jan. 23, 2025 at the Iowa Racing and Gaming Commission meeting Feb. 23 at the Wild Rose Casino and Resort in Jefferson. CREDIT RICHARD PRATT

The Iowa Racing and Gaming Commission (IRGC) decided Thursday not to answer a petition seeking to block the commission’s consideration of a Linn County gaming license application.

As a result, the IRGC remains on track – for now – to issue a decision Feb. 6 whether to grant a license for a Cedar Rapids casino, a $275 million project dubbed Cedar Crossing.

The gaming commission’s vote on the petition came after nearly an hour and half debate on whether the commission had the proper authority and standing to consider the petition for declaratory relief.

The petition was filed filed Nov. 8 by the Riverboat Casino and Golf Resort and the Washington County Riverboat Foundation, claiming that the wording of the 2021 Linn County ballot measure that permanently authorized gaming in Linn County was faulty under Iowa state code and that, as a result, the IRGC “lacks authority to issue a gambling games license in Linn County.”

Several Iowa gaming market studies have indicated that Riverside Casino stands to lose the most revenue overall if a Cedar Rapids casino is built.

The commission voted 4-1 to decline to consider the petition, after attorneys on both sides of the petitions presented arguments for their cases.

Mark Weinhardt, representing the Riverside Casino and the Washington County Riverboat Foundation, argued that the ballot language approved by Linn County voters in 2021 was misleading and failed to meet state requirements. In particular, he pointed to sections of the referendum that read “if the referendum is approved by a majority of voters, operation of gambling games with no wager or loss limits may continue” and “if disapproved by a majority of the voters, the operation of gambling games will end within 60 days of this election.”

“(The ballot) didn’t ask the voters to decide whether or not to commence or to initiate gaming,” Mr. Weinhardt said. “It asked the voters whether to continue gaming … This referendum in 2021 passed with a margin of 54.7% voting for, and so if you subtracted 5% of that one out of every 20 voters, that referendum fails. If voters look at the language that I’ve highlighted, we submit that it is likely that one in 20 or more of them would look at that and think, ‘Oh, I guess there must be gambling going on somewhere, somehow in Cedar Rapids or in Linn County someplace. And so they’re voting in order to continue something, rather than voting to initiate someplace.”

Attorney Guy Cook, representing the Cedar Rapids Development Group that would build and operate the Cedar Rapids casino, had a sharply different view, questioning the timing of the petition as well as the motivations behind it.

“Allow me to be blunt,” Mr. Cook said. “This filing is not in good faith. It does not meet the rules of the declaratory petition order, and it is a contrivance. The Riverside filing cannot and should not be granted under your rules … no one can say with a straight face that voters thought they were continuing gaming in Linn County, given all of the efforts to establish gaming in Linn County. No gaming had occurred, as you’ve explained in terms of previous actions by this commission.”

Mr. Cook said he felt the petition didn’t establish a valid argument.

“This filing is not genuine,” he said. “It’s not authentic. It’s not a real request for guidance or advice from this commission … one of the other commissioners mentioned the distinction between a shield and a sword, and normally, when there is a request for declaratory petition, it is to give guidance to that party that this commission regulates as to their conduct, how to proceed. That’s not what this is. This is an attempt to not use a sword, but use a nuclear option to destroy the authority of this commission, which it clearly has under the vote that was passed in Linn County.”

In his rebuttal, Mr. Weinhardt disputed the notion that the petition was submitted in bad faith.

“It’s not a corruption of the system,” he said. “An interested party – Riverside, the one who was going to be most cannibalized in the event that this casino is built in Cedar Rapids – raised a legitimate question at its earliest opportunity. It didn’t wait for two weeks from now. It raised it in November to say, ‘Does this ballot problem create an impediment to this commission granting a license?’ We submit that it does, and there is an easy solution to the problem. If this commission is otherwise inclined to grant a license, simply send this back to Linn County and have them do a referendum with compliant language. Have them do a referendum in which there is no doubt that it is putting the right question in front of the proponents. And if the sentiment is as pro-casino as the proponents of this casino say that it is, the referendum will pass, and then we will have this proceed with no legal cloud under it. If we skip over this step, we will proceed with a legal cloud.”

He also noted the possibility of “further proceedings” on the matter, “because somebody needs to decide whether or not this is a correct legal application of the statute. And it’s not an application of an election statute. We are not challenging what happened in the election in 2021. Linn County posed a question to its voters, the voters answered the question. We have no dispute about how that happened. This isn’t Bush vs. Gore. We’re not claiming that the votes were miscounted. The point is that the question that they posed wasn’t the right question.”

During the commission’s debate, commission chair Daryl Olsen said he felt a section of the Iowa Code was especially applicable to the issue. That section, as he summarized it, says the commission shall refuse to issue a declaratory order if “the petition is not based upon facts calculated to aid in the planning of future contact, but is instead based solely upon prior contact in an effort to establish the effect of that contact or to challenge a commission decision already made.”

“That hits absolutely the fact that we should not issue a declaratory order in this situation,” Mr. Olsen said. “We are not acting other than what we are told to do, and we’re told the commission shall not issue (an) order based on these facts. And we can argue forever whether these fit, but that one fits to a T. And for that reason, I think we have to decline to answer the question.”

After the meeting, Mr. Olsen said he was convinced the commission made the correct decision, but said he didn’t want to speak to the possibility of further legal challenges.

“I can’t speculate what could potentially happen,” Mr. Olsen said. “I think the proper move for us to make was to decline to answer answer it, for reasons that were very, very clear in the rule to me, that that was the right decision to make … the right thing for us to do is follow the rules. The rules were very explicit that said, if this is the situation, you decline to answer. So I think we did what the majority of the commission felt was the right way to follow the rules.”

Commission member Alan Ostergren, the only attorney on the five-member commission, cast the sole dissenting vote on the issue, after exploring in detail several legal considerations raised by the petition.

“I believe that we should answer this question,” Mr. Ostergren said. “I think we have no choice but to, based on what’s presented here, and I think we should grant the petition. I don’t believe that the language in 2021 was sufficient to authorize gambling games in Linn County today. I think that’s very unfortunate. I think we were presented with very persuasive arguments from the community that they supported (the measure). I hope that no matter what happens following today that the Linn County folks may well decide to put it on the ballot anyway.”

The commission plans to issue a formal written ruling on the petition by Monday.

Reached for comment after the meeting, Cedar Rapids Mayor Tiffany O’Donnell, a longtime advocate for a Cedar Rapids casino, said she wasn’t surprised by the commission’s decision on the Riverside petition.

“In 2021, voters here made their voices heard by approving gaming here,” she said. “And the will of the people isn’t ambiguous. It’s not up for interpretation by legal gamesmanship or self-serving arguments like we heard today. And yet here we are again, part of another delay tactic. I’m happy that the commission saw it for what it what it was and is moving along.”

Ms. O’Donnell also acknowledged that more legal measures may be pursued in the matter.

“With today’s delay tactics, it’s all about, lawfare by Riverside,” she said. “Are they going to continue to fight ballot language or not? I mean, they can threaten that. That’s business.”

While the commission’s final vote on a Cedar Rapids casino license is still expected Feb. 6, another potential hurdle has surfaced.

Bills have been introduced in both the Iowa House and Senate this week, seeking to impose a new five-year moratorium on the consideration of new gaming licenses in the state. The moratorium under both bills would be in effect through June 30, 2030.

If those bills are passed before Feb. 6, the commission would be prohibited from considering the Linn County casino license application.

A similar, two-year moratorium was proposed in the House in the waning hours of the 2024 legislative session, but the Senate adjourned before considering the measure.

A previous two-year moratorium expired at the end of June 2024, paving the way for Linn County casino supporters to file a third application for a casino gaming license. The IRGC has twice rejected Linn County casino license applications, in 2014 and 2017.