Tuesday, December 6, 2022

Cedar Rapids Mayor Asks Iowa Governor to Veto Casino Moratorium

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Posted on: June 3, 2022, 11:37h. 

Last updated on: June 3, 2022, 12:01h.

Cedar Rapids has been seeking a casino property to help jump-start the city’s economy for nearly a decade. A recent bill passed by the Iowa Legislature would delay such a gaming initiative for at least another two years.

Cedar Rapids Iowa casino gaming license
Cedar Rapids Mayor Tiffany O’Donnell (pictured) is urging Iowa Governor Kim Reynolds to veto legislation that would prevent the state from expanding its casino industry for two years. State lawmakers have signed off on a two-year new casino moratorium. (Image: The Gazette)

The Iowa Legislature approved a gaming bill last week that primarily has to do with minor regulatory changes. But lawmakers threw in with little discussion a two-year moratorium that blocks the Iowa Racing and Gaming Commission (IRGC) from issuing new gaming licenses until July 1, 2024.

Lawmakers justified the provision by saying the state’s 19 commercial riverboat and brick-and-mortar casinos need a stable operating environment in wake of the COVID-19 pandemic. Iowa’s 2019 authorization of sports betting, which has brought the gaming industry into the limelight with incessant sports betting advertising, was also cited for the two-year stalemate.

Officials in Cedar Rapids, Iowa’s second-most populated city, say the bill ordering the state gaming commission to forgo considering new casino bids is unfair. With Iowa Governor Kim Reynolds (R) not tipping her hand on whether she’ll sign House Fill 2497, or at least strike the moratorium component, Cedar Rapids Mayor Tiffany O’Donnell is pleading her case to sway the governor into a veto.

The best course for Iowa is to keep gaming decisions under the purview of the IRGC. They are best suited to determine the appropriate path forward for our gaming industry,” O’Donnell wrote in her letter to the governor.

“Accordingly, I respectfully ask you to veto HF 2497,” the mayor pleaded.

Market Changes

Cedar Rapids voters have already twice lent their backing to election questions regarding the authorization of a casino. An entity called the Cedar Rapids Development Group, which entails approximately 80 local investors, has since 2014 been proposing resort developments with gaming operations.

The IRGC, however, denied Cedar Rapids’ casino application in 2014 and 2017 on market saturation concerns. The group’s 2022 casino pitch argues that with the Cedar Rapids regional population growing by over 40,000 residents since the last census, the IRGC might be more inclined to issue the city a gaming license.

O’Donnell cited in her letter to the governor a recent IRGC-commission study conducted by The Innovation Group, a gaming consultancy. That study found a Cedar Rapids casino would only increase statewide net gaming revenue by $50 million a year.

Little Legislative Discussion

In the days following the decision by Iowa’s state politicians to place an embargo on new gaming licenses, it has become apparent that there was slim debate regarding the moratorium.

It was incredibly frustrating to learn of the lack of dialogue or consideration involved in the moratorium amendment,” O’Donnell told Reynolds. “On Senator Jack Whitver’s Iowa Press appearance, he stated the Senate Republican caucus discussed the issue for ‘probably 20 seconds.’”

“They [state lawmakers] probably didn’t have time to discuss the findings of the two recent, independent, IRGC-commissioned studies,” the mayor continued. “Given that the amended bill was filed and passed both chambers in a matter of hours, the city and IRGC were unable to share this critically important information with the legislature.”

Along with The Innovation Group review, the IRGC contracted Spectrum Gaming, another consultancy, to probe the business impact that new casinos in Nebraska will have on Iowa’s gaming industry. Analysts determined that new gaming offerings in Nebraska could cost Council Bluffs and Sioux City casinos 40%-45% of their market share.

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