Posted on: May 24, 2022, 08:00h.
Last updated on: May 24, 2022, 11:16h.
A proposed Iowa casino project in Cedar Rapids backed by Peninsula Pacific Entertainment (P2E) is facing long odds of receiving licensure from the state. That’s after lawmakers this week quietly passed a two-year moratorium on new gaming concessions.
House File 2497 is a comprehensive gaming package that mostly has to do with regulatory standards. But when Senate and House lawmakers passed the omnibus yesterday, they tossed in a two-year ban on new casinos. The stipulation, if the bill is signed by Gov. Kim Reynolds (R), would block P2E’s Cedar Rapids ambitions.
It’s incredibly disappointing that this can happen seemingly in the dark of night without the city to even have the opportunity to respond,” said Cedar Rapids Mayor Tiffany O’Donnell. “It’s disappointing knowing the voters wanted the casino, the amount of time, money, and effort from investors, as well as from the governor’s appointed Racing and Gaming Commission, that something like this can happen so quickly without any of us knowing about it.”
Voters in Linn County, home to Cedar Rapids, last November passed a local ballot referendum to allow county officials to seek a gaming license from the state. Linn County officials following the referendum partnered with P2E for the region’s casino hopes.
However, industry leaders have expressed concerns that Iowa’s commercial gaming market is already oversaturated.
Casinos Oppose More Casinos
Iowa’s 19 state-licensed casinos contend that a 20th commercial gaming property will only further saturate the market. And those casinos, which benefit the state to the tune of nearly $400 million annually by way of gaming taxes and fees, carry much weight in Des Moines.
State Rep. Bobby Kaufmann (R-Wilton), who chairs the House State Government Committee, said a 24-month suspension on new commercial casino considerations will preserve an “equilibrium” among the current operators and protect “the nonprofits that the casinos currently spend money on.”
The majority of the state tax is allocated towards charitable beneficiaries through the Iowa Endowment Fund. However, others say if Linn County wants to participate in gambling and reap the economic benefits, it should be allowed.
“This is incredibly unfair,” said Rep. Kirsten Running-Marquardt (D-Cedar Rapids). “People have been navigating and working with the Iowa Racing and Gaming Commission, and then all of a sudden we see a moratorium pop up.
“We give the power to the Gaming Commission for these licenses for a reason. It’s supposed to be fair,” she concluded.
Governor Has Critical Decision
P2E has proposed two casino plans for the Iowa Racing and Gaming Commission to consider.
The first blueprint is a $165 million undertaking targeting Cedar Crossing. The casino would house 840 slot machines, 22 table games, and a sportsbook. The second pitch is a smaller casino and investment. The $105 million proposal includes 550 slots, 15 table games, and sports betting.
P2E will soon be flush with cash after agreeing in February to sell most of its assets to Churchill Downs for almost $2.5 billion. The transaction remains under regulatory review.
Reynolds possesses the power to decide whether the state should allow a 20th commercial casino to come to Iowa, or if a two-year stoppage on new gaming venues is warranted. So far, the governor has not publicly expressed an opinion on the gaming moratorium passed by the Iowa Legislature.