At its November 16 meeting at the Diamond Jo Casino in Dubuque, the Iowa Racing and Gaming Commission voted 3-2 to deny all three applications for a Cedar Rapids casino. It was the second time in three years the commission voted against a casino in Cedar Rapids, the state’s second largest city, because, as in 2014 when commissioners voted 4-1 against it, they were concerned a Cedar Rapids casino would cannibalize businesses at existing nearby casinos.
One of the three proposals was the $40 million Wild Rose Cedar Rapids next to the Skogman Building on First Avenue SE. Two others from the Cedar Rapids Development Group included the $105 million Cedar Crossing Central attached to the DoubleTree Hotel on First Avenue NE, and the $165 million Cedar Crossing on the River at First Avenue and First Street SW. The proposals could have generated $23-$46 million in new revenue for the state.
The vote was tied 2-2 when Commissioner Kris Kramer stated, “It has been said that if Cedar Rapids does get a license that the neighboring casinos will feel the negative effect, but will bounce back. I disagree with that statement. The income from the nonprofits would be substantially decreased, which in turn would devastate some rural communities that rely on it. Rural Iowa does not have all the advantages that the larger cities have. At this time, I cannot approve a license.”
Commissioner Delores Mertz noted she was the only one to vote for a Cedar Rapids license in 2014. “I felt like the second largest city in the state deserves something, and I still feel that way,” Mertz said. Commission Chair Rich Arnold also voted for the Cedar Rapids license. He said he recognized the impact on other casinos, but said he believed the positives would outweigh the negatives. He said he leaned toward the proposal for a smaller casino. “I want to emphasize that my support is not an invitation for smaller size or more casinos. The project is unique in my mind because it will bring in over $100 million in investment into the community and into the state without increasing the overall number of gambling devices by a material amount.”
Commissioner Jeff Lamberti said says it was not easy to vote against Cedar Rapids again. “More difficult than three years ago. I think some things have changed. I think we have great proposals before us. I tried to take into account the factors we set forth in our rules and they are competing, and it makes it difficult because there are great arguments on both sides of this process,” Lamberti said. But added, “The overriding factor for me is I simply don’t see much of a change. I don’t see any growth in our market. It has been relatively stagnant. I don’t see anything that tells me that we are going to enter into some period of significant growth.”
Commissioner Karl Heinrich, who cast one of the three no votes, said, “I’m not sure that adding a new license will help the state in any way. If any of the proposals were approved, it would shift our resources. So, I don’t think now is the time to change the dynamics of what we are seeing working well at this time, so I am not in favor of a new license.”
After the vote, Wild Rose Casinos issued this statement:
“We believe that our proposal struck a delicate balance in terms of offering long-term benefits to Cedar Rapids and Linn County—entertainment; support for downtown hotels, restaurants, theaters, concerts and shops; and nonprofit funding—while also addressing the concerns articulated by the commission back in 2014. It is disappointing that Linn County will not get a gaming license. As always, we respect the decision of the Iowa Racing and Gaming Commissioners. Wild Rose continues to operate in Iowa, and our team remains focused on identifying new ways to grow and expand our operations in the Midwest.”
The commission, which oversees the 19 state-licensed casinos, is made up of the same members who voted 4-1 in 2014 to reject the $164 million Cedar Crossing on the River. At the time, reports indicated Riverside Casino & Golf Resort, located 45 minutes south of Cedar Rapids, would experience significant cannibalization. Projections for the three new proposals were less than in 2014 but still showed Riverside could lose 20 percent or more in annual revenue.
Linn County voted 61 percent in favor of a Cedar Rapids casino in a required referendum in 2013. Lamberti said, following the 2014 rejection,
Lamberti said, “We have some duty to maximize revenue. We have a duty to look at what is best is for the state. On one hand, we do take into account the existing facilities– the investment that’s been made. But, we’re also charged with doing the best job we can to maximize revenue to the state.” Iowa receives more than $280 million annually from casino tax revenue.
Since 2005, the commission has granted six license applications and denied 10.
