2-year moratorium on new casinos signed into law by Iowa Gov. Reynolds | State and Regional News

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.

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