There will be no casino in Cedar Rapids for at least two years after Gov. Kim Reynolds signed into law Friday a provision that places a moratorium on new casino licenses.
An amendment to a larger gambling bill means regulators cannot issue any new licenses in Iowa — including plans for a potential $250 million, 160,000 square-foot entertainment and cultural arts complex at the site of now-demolished Cooper’s Mill near downtown Cedar Rapids — until June 2024.
Citing “gambling fatigue,” the Republican-led Iowa Legislature this year approved the two-year moratorium on new casinos, essentially taking action on a matter that traditionally has been conducted by the state’s Racing and Gaming Commission.
The moratorium was inserted into House File 2497, a larger bill on state gambling regulations, in the waning days of the 2022 session. Sen. Roby Smith, a Republican from Davenport — which already has a casino — ran the amendment for the moratorium.
Cedar Rapids Mayor Tiffany O’Donnell said she spoke with Reynolds and the governor understands signing the bill into law is “a disappointing decision for me as mayor and for the city.”
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“I expressed to her my disappointment and reassured her that Cedar Rapids would still be here when the moratorium is lifted in two years,” said O’Donnell, who had asked the governor to veto the bill. “She encouraged us to stay the course as she and others pay attention to the gaming industry.”
Whether or not to extend the moratorium once it sunsets in two years is a decision for Iowa lawmakers, O’Donnell said, but it’s Cedar Rapids’ job to ensure the state understands what a benefit it will be to have a casino in Iowa’s second- largest city.
The Cedar Crossing Casino proposal calls for bars, restaurants, a 1,500-capacity entertainment center and other venues on F Avenue NW along the west side of the Cedar River, between Kingston Village and Time Check Park. The project, near the Cedar River, also would incorporate a flood wall.
“The city remains committed to bringing this world-class entertainment venue to Cedar Rapids,” O’Donnell said. “Our citizens deserve a place to find a wide range of entertainment options and we know it will spur growth around it. It remains a priority of the city to work alongside the developer to get it done.
The new law jeopardizes Cedar Rapids’ third try for a casino. The Iowa Racing and Gaming Commission previously denied a gaming license to Linn County in 2014 and 2017, both times citing a studies showing it would “cannibalize” revenues from other casinos, particularly Riverside Casino & Golf Course in Washington County.
Jonathan Swain, president of Peninsula Pacific Entertainment, Cedar Rapids’ preferred casino operating company, said last month when state lawmakers passed the moratorium that local investors in the project believe that as long as they are patient, the outcome will be positive. The bill would not sway their commitment to building a Linn County casino, he said.
City Manager Jeff Pomeranz noted the developer’s commitment to bringing this proposal forward to state regulators once the moratorium sunsets.
“Jonathan Swain and the investors have a very significant financial commitment for this project,” Pomeranz said. “At this time, the city has every intention of supporting the project and the investors by earmarking the property for a future casino development.”
The Iowa Gaming Association, which represents Iowa’s 19 state-licensed casinos, supports the moratorium, according to the group’s president and chief executive officer Wes Ehrecke.
But the moratorium seems to put Reynolds at odds with the five-member panel she appoints to regulate Iowa’s gaming industry.
Iowa Racing and Gaming Commission members earlier this month said they were “disappointed” and “surprised” by the moratorium, and some felt the regulatory commission process kept politics out of licensing decisions.
“My concern is if this is signed, politics is now in Iowa’s gaming industry,” commissioner Lance Horbach, a former Republican lawmaker from Tama, said at the commission’s June 2 meeting in Emmetsburg.
Cedar Rapids casino backers were hopeful the current commission would be receptive to a Linn County casino, as previous opponents had cycled off the panel.
Some Iowa lawmakers who opposed the moratorium fear it would give an opening for states Nebraska and Illinois to further expand their gaming industries. Cedar Rapids gaming interests believed the time was right for Iowa to compete with the nearby markets by awarding a license for a Linn County casino.
In two years, O’Donnell said there could be a new slate of commissioners and the gaming landscape itself may change.
“We have to be prepared for all of it,” O’Donnell said.
States with the most gambling and sportsbook writers and runners
States with the most gambling and sportsbook writers and runners
Every US state has been allowed to decide its own laws on sports betting since May 2018, when the Professional and Amateur Sports Protection Act, known as PASPA, was overturned by the US Supreme Court. Passed by Congress in 1992, PASPA had blocked a state expansion of sports betting, which the high court decided was unconstitutional.
The challenge to PASPA was led by the state of New Jersey, where former Gov. Chris Christie and lawmakers wanted to legalize sports betting at casinos and racetracks. Professional basketball, football, hockey, and baseball leagues as well as college athletics all fought back, claiming sports betting the integrity of their competitions. Eventually, however, the leagues began to acknowledge that rather than PASPA putting a stop to sports betting, it had, in fact, forced it underground where the lucrative trade was dangerously unregulated.
In the year following the Supreme Court decision to overturn PASPA, the states of Delaware, New Jersey, New York, Pennsylvania, West Virginia, Rhode Island, Mississippi, and Arkansas all kicked off legal sports betting.
In 2021, US sports betting revenue is predicted to hit $2.5 billion and grow to $8 billion by 2025. Today, more than a dozen states allow sports betting.
To find the states with the most sports betting jobs, BestOdds analyzed the Bureau of Labor Statistics’ May 2020 Occupational Employment and Wage Statistics Report. The report, which contains an exhaustive list that categorizes nearly every job in the United States, was released in Spring 2021. The States were ranked by the total number of gambling and sportsbook writers and runners.
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#14. Alabama (tie)
– Total employment: 150
– Employment per thousand jobs: 0.08
– Annual mean wage: $24,530
Sports betting is not legal in Alabama, although the state’s Senate in 2021 advanced a package of measures aimed at legalization that failed to reach the floor of the House for a vote. It was the closest the state has come to legalizing gambling: The proposals included establishing a state lottery and turning racetracks into casinos, with mobile and retail sports betting. Two of Alabama’s states, Mississippi and Tennessee, casino and mobile-only sports betting, respectively. Three tribal casinos in Alabama are run by the Poarch Band of Creek Indians.
Meanwhile, supporters of gambling legislation have their sights set on 2022.
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#14. New Jersey (tie)
– Total employment: 150
– Employment per thousand jobs: 0.04
– Annual mean wage: $36,840
Bettors in New Jersey, a leader in sports betting in the United States, wagered $6 billion in 2020, beating out an earlier record of $5.4 billion set by Nevada. It included $4.1 billion in bets made in the last five months of 2020, and betting for the year was topped off by an all-time high of $996.3 million in wagers in December. New Jersey bettors can register for more than 20 mobile sportsbooks, and in December, more than 93% of the money was bet online.
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#13. Mississippi
– Total employment: 160
– Employment per thousand jobs: 0.15
– Annual mean wage: $24,320
Mississippi repealed its ban on sports betting in 2017, and retail betting went into effect in August of the following year. Legal betting takes place only at the state’s 26 casinos, although there have been efforts to legalize mobile sports betting as well. In 2021, three bills that would have expanded the state’s betting to online platforms failed to make much progress with lawmakers.
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#12. Oklahoma
– Total employment: 170
– Employment per thousand jobs: 0.11
– Annual mean wage: $21,260
The governor and legislature of Oklahoma and two federally recognized tribes reached a deal in April 2020 on new gaming agreements that included sports betting at their casino properties. But the future of play has been put in question by a group of state lawmakers and the state’s attorney general who oppose the betting measure. Given that Oklahoma has more than 100 casinos, pressure to approve sports betting is likely to grow from the other 33 tribes that operate the gaming venues.
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#11. Arizona
– Total employment: 180
– Employment per thousand jobs: 0.06
– Annual mean wage: data not available
Legal in Arizona as of April 2021, sports betting with statewide mobile wagering is expected to kick off in September with the start of the NFL pro football season. The measure was approved by the state House in March and the Senate in April after Gov. Doug Ducey argued for the need for sports betting in his State of the State address in January. Legalizing sports betting entailed negotiating a new compact with the 16 tribes in Arizona, members of whom operate 24 casinos. Mobile sports betting has yet to be legalized in the state, but legislators are expected to approve it later in 2021.
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#9. New York
– Total employment: 270
– Employment per thousand jobs: 0.03
– Annual mean wage: data not available
This year, lawmakers in New York agreed to allow online sports betting; Gov. Andrew Cuomo provided his signature on the budget and revenue measures to launch the approval process. The state set a minimum tax rate of 13% for providers to pay, but that rate is expected to be driven higher in negotiations during a competitive bidding process.
Two chosen platform providers will pay a fee of $25 million to the state to operate sports betting, and they will pay casinos $5 million a year to host their mobile betting servers. Lawmakers have eyed the 2022 Super Bowl as a target date for launching online betting.
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#8. Florida
– Total employment: 300
– Employment per thousand jobs: 0.04
– Annual mean wage: $27,550
Sports betting could become legal this year in Florida. A new compact signed in May by the state and the Seminole Tribe of Florida, which wields considerable political clout, to allow mobile wagering may have laid the groundwork for more expanded betting in the Sunshine State. Questions that may slow the process have arisen about aspects of mobile sports betting under tribal gaming law. Other opposition has come from critics who say the legalization of sports betting should require voter approval.
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