Recently 16 of Iowa’s 19 state-regulated casinos joined a lawsuit filed in Polk County District Court seeking a permanent injunction against the release of their annual audits—records that have been open to the public for nearly 30 years. The casinos argue the financial reports serve no public purpose, but expose trade secrets. They said the information should be considered exempt from a 1989 Iowa law that mandates government transparency.
Iowa Racing & Gaming Commission member Carl Heinrich said the casinos “are not trying to hide anything. They’re just trying to protect their business interests. The information would be accessible to people who need to know it.”
Iowa Gaming Association President Wes Ehrecke added, “We have no problem giving that information to our regulators, but it shouldn’t be given to our competitors.” Additionally, Ehrecke said, casinos do not have a problem with sharing information with their local nonprofit partners, which hold their state gaming licenses. He said the IGA also plans to lobby legislators to change the law to keep the reports secret.
The lawsuit originated after a request for the documents was filed by Patrick Fox, an executive at the Grand Traverse Band Economic Development Corporation, which oversees Native American casinos in Michigan.
The annual casino audits have been used in reports about the financial stability of the Iowa gambling industry. In particular, communities and nonprofits that depend on gambling taxes or charitable contributions are known to consult the annual audits.
Wild Rose, which owns casinos in Clinton, Emmetsburg and Jefferson, did not join the lawsuit. Spokeswoman Jamie Buelt noted much of the information in the audits already is made public in federal reports through filings required by the U.S. Securities and Exchange Commission. She stated, “At this point, we didn’t see the benefit of the injunction. Since the first gaming licenses were awarded, the financial statements have been public information. We’re not sure what’s changed.”
In court documents, attorneys for Iowa Attorney General Tom Miller stated, “If the court so determines, the Iowa Racing and Gaming Commission will refrain from releasing the information requested.”
Iowa Freedom of Information Council Executive Director Randy Evans noted, “The thing the public hears with increasing frequency is that letting the public in on these things will put them at a competitive disadvantage or harm the entities. The ones who would be left in the dark going forward is the public.”
Last year Iowa gambling operations generated more than $312 million in gambling taxes and contributed nearly $40 million to charities.
