Rep. Bobby Kaufmann, R-Wilton, spoke on the Iowa House floor Jan. 30, 2025, in support of a bill implementing a moratorium on new casinos in Iowa. (Photo by Robin Opsahl/Iowa Capital Dispatch)
With a looming deadline of Feb. 6, the Iowa House approved a bill Thursday that would set a five-year moratorium on new casinos in Iowa.
The House passed House File 144 on a 68-31 vote Thursday, a bill establishing a moratorium on new casinos in the state through June 30, 2030. The legislation was quickly moved through the subcommittee and committee process earlier this week as lawmakers supporting the measure seek to prevent the Iowa Racing and Gaming Commission (IRGC) from potentially issuing a license to the Cedar Crossing Casino and Entertainment Center, a proposed $275 million facility in Cedar Rapids, at its meeting scheduled for Feb. 6.
Studies commissioned by the IRGC found more than half of estimated revenue from Cedar Crossing would come out of revenue currently headed to existing Iowa casinos. However, the Cedar Rapids proposal was estimated to generate a new $60 million in total statewide commercial gambling revenue by 2028.
Rep. Bobby Kaufmann, R-Wilton, who proposed the legislation, said that the measure was necessary because of the impact on existing casinos in Iowa.
“I think the studies show significant cannibalism is very real,” Kaufmann said. “And I do believe we are in the correct purview to tell the Iowa Racing and Gaming Commission how they should make major decisions. We created them, we change the rules on a nearly yearly basis. A ruling of this significance, I believe should have us electeds’ involvement.”
Rep. Sami Scheetz, D-Cedar Rapids, said the Iowa Legislature should not impose a moratorium and instead allow the IRGC to “do its job” and evaluate the Cedar Rapids proposal. He noted the commission previously denied Cedar Rapids casino licenses in 2014 and 2017. He said the IRGC considers factors like market saturation and cannibalization when making its decision, while also looking at a casino proposal’s impact on the state’s overall gaming revenue when making a decision.
The proposal also includes new rules for casino license applications after the moratorium, prohibiting the commission from issuing licenses to new facilities that are projected to impact the adjusted gross receipts of an existing licensed casino by more than 10%, or negatively impact the annual distributions of a qualified sponsoring organization. The legislation also proposes a ban on applications from counties where the IRGC has declined to issue a license within the past eight years.
Scheetz said while gaming is a regulated industry, the Legislature is overstepping its bounds by putting “its thumb on the scale” in favor of existing casino licensees.
“In no other industry in the state of Iowa, do we have (those) kind of anti-competitive rules,” Scheetz said. “… In no other industry in the state of Iowa are you told, ‘you cannot enter if you’re going to hurt the people that are already there.’ That goes against the basic principles of free markets and competition, which is something that I know so many people in this room believe in.”
Kaufmann said “the free market in any capacity does not exist in the Iowa gambling world.”
Senate advances companion bill
The measure will quickly become available for debate in the Senate, as lawmakers in the chamber also moved to advance casino moratorium legislation Thursday. A companion bill, Senate Study Bill 1069, was approved by a subcommittee and in the Senate Local Government Committee Thursday despite opposition from Cedar Rapids and Linn County officials, as well as advocates with trade organizations.
Cedar Rapids Mayor Tiffany O’Donnell asked lawmakers at the Thursday subcommittee meeting to “play fair and let the process work.” She also said concerns about competition created by the proposed Cedar Rapids casino are not well-founded — and more scrutiny should be put on casino owners like Dan Kehl, CEO of Elite Casino Resorts, who is also building properties in Nebraska and Illinois.
“We’ve heard the argument before a new casino is going to provide cannibalization and take away revenue from others, except history, frankly, tells us that as simply not true,” O’Donnell said. “Communities with competing interests within those cities are not just surviving, but they’re actually thriving. And let’s be honest, when Dan Kehl opened up a casino just across the Nebraska border. I don’t recall him asking this body or anyone else whether or not it was okay to compete with us. That’s what a free market economy is about. So why are we here today being asked to seek permission to merely compete in our own state?”
Matt Hinch, representing Elite Casino Resorts, said the business’ two non-Iowa casinos are not near the Iowa border or at risk of cannibalizing the Iowa gaming market. However, he said, a Cedar Rapids casino would pose a significant risk of infringing on existing Iowa casinos’ revenue, potentially impacting the livelihood of employees and the local communities’ economies.
“We have 19 commercial casinos and four tribal casinos in the state of Iowa — the market is absolutely saturated,” Hinch said. “Many of these casinos are family businesses that employ lots of Iowans, and having a casino in Cedar Rapids will have a substantial negative impact on those jobs.”
The bill was approved unanimously in the subcommittee meeting, and passed through the Senate Local Government Committee.
Sen. Zach Wahls, D-Coralville, spoke against the measure, saying that the Legislature was interfering with the IRGC’s assigned role and if passed, “we should have a conversation about ending the Racing and Gaming Commission.”
But Sen. Scott Webster, R-Bettendorf, argued lawmakers are charged with setting “guidelines and guardrails” for the commission — and this bill is part of that duty. He also pushed back against arguments that the moratorium was specifically targeting the Cedar Rapids casino, saying the measure was meant to stop major expansions of the casino industry in Iowa.
“If we think that one casino is the question on this bill, I think we are definitely wrong. This is about casinos throughout the state of Iowa. This is about setting guardrails and setting policy for how that casino expansion happens in our state, before it just rapidly takes off at a pace out of anybody’s control completely.”
If approved by the Senate, the bill will head to Gov. Kim Reynolds’ desk for a final decision. Though the governor has not made a statement on whether she would support a moratorium, Kaufmann told reporters after introducing the legislation he had “a personal high level of confidence that the governor would consider signing it if we get it done.”