An Iowa House panel recently approved House Study Bill 719 which would lower the state’s tax rate for licensed casinos. Lawmakers said the move would help Iowa’s 19 casinos compete with new gambling facilities opening in neighboring Nebraska and Illinois.
The bill’s sponsor, state Rep. Jane Bloomingdale, told the Iowa Capital Dispatch, “We’re lowering taxes for individuals, we’re lowering taxes for corporations, but we’re not lowering taxes for casinos. It just doesn’t seem fair. If we’re going to lower taxes for everyone across the state of Iowa, we maybe need to look at everyone.”
The bill would lower the graduated tax rate on casinos for gross gaming revenue from slots and table games. Currently, casinos that generate at least $3 million gross gaming revenue pay the highest rate, 22 percent, but under the proposal, that rate would drop one percentage point per year for three years to a 19 percent rate in fiscal year 2027.
At a House committee hearing on the bill, state Rep. Mike Sexton asked how the lower tax rate would help Iowa casinos be more competitive. In response, Doug Struyk, representing Great River Entertainment and Caesars Entertainment, which own casinos on Iowa’s eastern and western borders, said Iowa casinos attract many out-of-state visitors, but the opening of WarHorse Omaha in 2024 will put a “tremendous amount of pressure” on Harrah’s and Horseshoe, both Caesars’ casinos in Council Bluffs.
Struyk told the Dispatch, “It will to take additional investment in the facilities in Iowa to continue to be bright, shining new attractions, to keep people wanting to come over.”
In addition, Iowa casino lobbyists said that while their businesses are doing well in the state, lower tax rates in Nebraska and Illinois could put Iowa casinos at a disadvantage in the future.
State Rep. Monica Kurth expressed concern about the tax cuts leading to fewer funds for the Rebuild Iowa Infrastructure Fund budget, which pays for infrastructure and building maintenance and improvement projects, water quality and tourism. Kurth said, “A downturn in the money brought in, I think could hurt those programs. I think we’re talking probably about double-digit millions that that tax cut would give.”
Bloomingdale noted casinos have given back significantly to their host communities and tax cuts would allow them to invest even more money in the state economy and local resources. She told the Dispatch, “Every fire department has a new fire truck, every church has a new roof, every cemetery has tombstones that have been fixed, on a paved road. So I look at the things that they’ve done in our communities that, if they have 1 percent more income, that money would go directly into our communities.”
According to the Iowa Racing and Gaming Commission, gambling revenue surpassed $4 billion in fiscal year 2023, although gambling and sports betting revenue decreased slightly from the previous year.
