Iowa state Senators Wally Horn and Dan Zumbach recently introduced gaming reform legislation that would authorize the state’s first smoke-free casino in Cedar Rapids; lawmakers exempted casinos from the state’s indoor smoking ban in 2008. The bill also would double, to million, the amount of gambling revenue the state directs to 84 of the 99 counties that do not host casinos. Another provision would eliminate about million in taxes that casinos pay on free-play promotions, with half the savings given to nonprofits that hold the licenses for state’s 19 casinos.
In addition, the measure would enact a 10-year moratorium on new casino licenses. The Iowa Racing and Gaming Commission already imposed a three-year moratorium, noting the gambling has reached the saturation point. Also, the bill would waive the one-time $20 million state casino license fee, in exchange for Cedar Rapids casino investors taking the risk of opening the state’s first smoke-free casino.
Horn, the former senate majority leader and longest-serving member of the Iowa legislature, stated he expects the main challenge to the bill will come from legislators from the state’s 15 counties with casinos. “I think our chances are very good except we have one problem, and that’s the other casinos being selfish and not wanting us to have one in Cedar Rapids. They fought the same battle to put another casino in the state, and then when they got it, then they turned the opposite direction. They’re going to have money. Casinos have a lot of money. And so with that and selfishness as far as letting Cedar Rapids have one, that’s our big problem.”
Horn’s prediction was confirmed by Wes Ehrecke, president and chief executive officer of the Iowa Gaming Association. He said the state’s casinos will fight any gaming legislation that shifts the authority to grant state gaming licenses from the IRGC to the Iowa legislature. The IRGC in April voted 4-1 against a gaming license for the proposed $164 million Cedar Crossing Casino across the Cedar River from downtown Cedar Rapids because commissioners said it would take business from casinos in Riverside, Waterloo and Dubuque.
Said Ehrecke, “We think that the Iowa Racing and Gaming Commission should be the deliberative body that does that thorough analysis that determines approval of casino licenses. And I think this proposed legislation would be unchartered precedence to usurp their regulatory authority.”
Dan Kehl, chief executive officer at the Riverside Casino and Golf Resort, who also has an interest in the Davenport and Larchwood casinos, called the Horn-Zumbach proposal “a gaming expansion bill masquerading as a gaming reform package. There is no need to circumvent the IRGC’s authority and history of doing what’s best for the state,” Kehl said.
In addition, Tim Hurley, president of the Black Hawk County Gaming Association and former Waterloo mayor, said the lawmakers’ proposal to seek legislative approval for a casino is an attempt to bypass rules they were responsible for establishing. “I wish it would go away. I’m irritated by this. They have good intentions, but that horse is out of the barn until the industry starts going again. It’s a saturated market. The industry is lagging. I don’t care if it’s smoke-free, I don’t care if they hang cowboys upside down or what they do. It’s going to impact us. We argued the same thing last April and May.”
Hurley also said the measure’s 10-year gaming license moratorium was “two-faced.” He said, “They want a license for Linn County, and then shut it off for everyone else for 10 years after that.” He noted Linn County voters previously rejected casino referendums when Black Hawk County and others passed them.
In defense of the legislation, Zumbach said, “This is a different animal than what we’ve had in the past. We’re going to distribute the funding differently. We’re going to have a smoke-free, and so it’s not your traditional casino. So when we’ve had a law that’s been in place for 25 years on the dynamics of casinos, and now we’re looking at something new, that’s a good door to open up and force us to look at. Do we need a different animal on the block? And I think we do.”
Cedar Rapids Mayor Ron Corbett, former speaker of the Iowa House, said after the IRGC rejected the county’s application for a gaming license, IRGC Chairman Jeff Lamberti specifically encouraged Cedar Rapids casino supporters to seek help from the Iowa legislature. Since then Corbett’s group developed the bill to appeal to urban and rural lawmakers as well as key lobbying constituencies. Corbett also noted the measure will provide a more equitable distribution of casino revenue and will benefit every county in Iowa.
State Rep. Todd Taylor said he will introduce companion legislation in the Iowa House to the Horn-Zumbach bill in the senate.
