Proposed casino license moratorium upsets Cedar Rapids supporters

Linn County Gaming Association president: ‘We deserved a fair shot’

UPDATED: Supporters of a proposed Cedar Rapids casino are decrying a measure approved by the Iowa Legislature that would impose a two-year moratorium on consideration of new casino license applications in the state.

In a surprising move Monday, lawmakers voted to approve House File 2497, a bill regarding gaming and casino regulation in the state, with a new clause that would maintain the state’s 19 existing casinos but prevent the Iowa Racing and Gaming Commission (IRGC) from considering new casino proposals for two years, beginning June 1, in counties that don’t already have operating casinos.

The Senate passed the measure 35-11 earlier Monday, with the House adding their approval later in the day on a 60-23 vote.

If the measure is approved by Gov. Kim Reynolds, Cedar Rapids casino developers would have to wait until July 2024 to submit a gaming application to the IRGC for consideration.

The move is particularly surprising, since the IRGC signaled in March they were open to considering a new Cedar Rapids casino application.

Tiffany O'Donnell
Tiffany O’Donnell

Cedar Rapids Mayor Tiffany O’Donnell said she had no indication the measure was being considered by state lawmakers.

“The city found out about the amendment through one of our legislators who was equally stunned by the move,” Ms. O’Donnell said. “This smacks of a backroom deal, signed and sealed before it even hit the House and Senate floor. This is not how Iowans do business. I’m not a politician and it makes me sick to see our government operate this way.”

Ms. O’Donnell also said she wasn’t sure what motivated the new clause.

“That’s the million dollar question for Cedar Rapids,” she said. “I think we need a complete airing of why state legislators chose to bypass the work of the IRGC and pre-empt their ruling on new casinos right before they were to meet – nine days from now. Someone was desperate to circumvent the process – to fix the game. It just doesn’t hold up to the smell test.”

Jonathan Swain

Jonathan Swain, president of Peninsula Pacific Entertainment, the parent company of the Cedar Rapids Development Group that’s working with the nonprofit Linn County Gaming Association to develop a casino proposal, said in a statement that his company will continue working to bring a casino to the city.

“For years, our team has patiently followed the process set by the Iowa Racing and Gaming Commission — and we know the time is right to invest in Iowa and to bring a world-class entertainment destination to Linn County,” Mr. Swain said. “We believe the IRGC, which assesses our state’s gaming landscape, is best equipped to make the decision on the number of gaming licenses in the state. This unprecedented statutory moratorium has taken the decision out of the hands of the IRGC and interferes with the gaming license application process.

“As the team that has set the vision and has long led the charge to bring a casino to Cedar Rapids, we will remain committed to realizing our plan to bring an entertainment and gaming center that Linn County deserves,” Mr. Swain added.

Linn County Gaming Association president Anne Parmley said the move will have far-reaching implications for the community.

Anne Parmley

“In an act clearly targeting Linn County, the moratorium passed by the state legislature will affect far more than gaming within the state,” Ms. Parmley said. “It will impact local nonprofits that need support and could benefit from the 8% that has been promised through the net gaming revenue of a new entertainment and gaming center. This holds the Corridor back from entertainment, nightlife, dining and gaming options that were set to breathe new life into Iowa’s second largest city and give much-needed support and infrastructure improvements to the area.

“We deserved a fair shot to put our best plan before the IRGC,” Ms. Parmley added, “which could have potentially granted us a gaming license that would ensure we could have brought these benefits to our communities much sooner than this bill now allows.”

Ms. O’Donnell said she felt Cedar Rapids was the target of Monday’s move.

“It sure feels like lawmakers had Cedar Rapids in mind when they wrote the amendment,” she said. “We’re the only ones that are at the brink of having an approval. The amendment allows for casino growth, but only by existing casino operators in counties that already have casinos. Free reign for existing casinos with no competition – that’s some deal.”

However, Ms. O’Donnell indicated that city leaders will continue to make their case for a Cedar Rapids casino.

“A two-year moratorium is disappointing,” she said. “That said, I take very seriously the referendum passed by Cedar Rapids voters. We will work with our partners at home and in Des Moines to identify a way forward. Cedar Rapids, and our mission to add jobs, grow our economy and provide world-class entertainment for our residents, isn’t going away. We’re not done fighting for Cedar Rapids.”

In November, voters approved a referendum that permanently authorizes gaming in Linn County, paving the way for a new Cedar Rapids casino application. The IRGC has twice rejected casino proposals for Linn County, in 2014 and 2017, after commissioners largely sided with opponents who argued the state’s gaming market was saturated and a new Linn County casino would “cannibalize” revenue from existing state-licensed casinos.

Specific plans for a Linn County casino haven’t yet been announced, but Mr. Swain had previously indicated that “we’ve always expressed a preference for (downtown) Cedar Rapids. We’ve evaluated half a dozen sites, and we still are focused on something that can help re-energize downtown Cedar Rapids.”