The Iowa Racing and Gaming Commission sent a strong message last week to backers of a casino project in Cedar Rapids: don't bother trying to get a license for at least the next three years.
Rational actors would have started working on Plan B for prime downtown real estate as soon as commissioners voted down the application for a Cedar Rapids casino in April. But Mayor Ron Corbett and some other movers and shakers are determined to chase the gambling dream, through legislative or judicial means. Instead of taking the hint from the Racing and Gaming commissioners, Corbett is ratcheting up his strategy for gaining legislative approval for a new casino. He's smart and experienced enough to know that state lawmakers need a better excuse for acting than "we don't like what the commission did." So, he's now dressing the casino project up as a public health initiative. Lawmakers shouldn't fall for or hide behind this ruse.
Radio Iowa's Dar Danielson posted the audio and highlights from the Racing and Gaming Commission's July 31 meeting. Commission chair Jeff Lamberti and his colleagues explained that in light of research showing "saturation of the [gambling] market" and new casinos set to open soon in Sioux City, Jefferson (Greene County), and Davenport, they are not inclined to consider any new applications for casino licenses during the next three years.
That should have been a cue for Cedar Rapids leaders to start looking for other options. But Mayor Corbett received the message differently:
"This opens the door for us to approach the legislature," Corbett said. "We can't stand around like stooges and do nothing."
He said the commission's freeze of sorts on new license applications - which the commission has been saying to expect for a few months - was nothing short of locking the door on the prospect for a new casino in Cedar Rapids or elsewhere in Iowa and throwing the key to the Iowa Legislature.
"I'll look at this as a signal to put together a legislative package, one that will address not just Cedar Rapids's situation but some of the inequities we've seen on how gaming revenue is distributed to Iowa's nongaming counties," Corbett, who believes Iowa's casino industry is stagnant but not saturated, said.
"This legislative approach may be a long shot, to use a gambling term," he continued. "But it might be worth the effort. We might get a better hearing out of a legislative body that has more concerns than actual casino industry regulation."
On August 3, Rick Smith reported for the Cedar Rapids Gazette on Corbett's legislative proposals:
The mayor thinks that the proposed $174 million downtown Cedar Rapids casino will give the city and its downtown a boost. But he said a Cedar Rapids casino also can breathe some new life into Iowa's casino industry.
Business at casinos is down, in part, from stagnation and from a lack of fresh ideas, he said.
His answer to the casino blues is the first piece of his gaming reform proposal, which would create Iowa's first smoke-free casino in Cedar Rapids to see if such a new product could help rejuvenate the state's gaming industry.
"We'll volunteer," the mayor said. "We'll be the guinea pig. We'll try it." [...]
Corbett's gaming reform proposal, though, includes components to win the legislative backing of more than Cedar Rapids and Linn County legislators, the American Cancer Society, the American Lung Association and wellness proponents across Iowa.
The reform proposal package also will double to $21.8 million a year the amount of state casino tax revenue that goes back to the 84 of 99 Iowa counties without casinos and to their not-for-profit organizations.
In addition, the proposal eliminates the $22 million annual tax that casinos now must pay on free-play promotions that they offer to attract customers. The tax savings will encourage casinos to offer more promotions, which should increase business, while half of the tax break will go to the not-for-profit organizations in casino counties, according to the proposal.
The Corbett proposal also will establish a 10-year moratorium on new casino licenses once a license is granted to a smoke-free casino in Cedar Rapids and perhaps one other spot in the state.
Bleeding Heartland opposed the exemption granted to casinos since before Iowa's public smoking ban went into effect. But let's be clear: lawmakers can fix that mistake, protecting the health of casino workers and customers, without approving a new facility for Cedar Rapids. All they need to do is amend state law to remove the casino exemption from the Iowa Smokefree Air Act.
Corbett's a former Iowa House speaker, and I have to give him credit for coming up with clever spin. Aligning the casino project with Cedar Rapids' status as a "Blue Zone" community gives cover to lawmakers from elsewhere in the state. They can claim they're trying a public health experiment, not looking out for a few developers.
The reality is, research shows casinos do not improve public health in any way, shape, or form. On the contrary, problem gambling increases with accessibility and incurs major hidden health costs.
Although some statehouse Democrats are already on board with the smoke-free Cedar Rapids casino gambit, I am inclined to think Corbett faces an uphill battle during the 2015 legislative session. True, the casino tax revenue proposals dangle a carrot in front of counties not currently containing a gambling facility. In addition, Iowa House Speaker Kraig Paulsen represents a Linn County district, which would be helpful if Republicans maintain their Iowa House majority. But lots of state legislators represent districts containing casinos that could lose business to Cedar Rapids.
If Corbett and his allies can persuade the Iowa House and Senate to approve new law on gambling, getting the governor to sign the bill should pose no problem. Financial backers of the Cedar Rapids casino have close ties to Governor Terry Branstad's administration, and Democratic gubernatorial candidate Jack Hatch is already on record supporting the Cedar Rapids project. (His running mate is Cedar Rapids City Council member Monica Vernon.)
Any relevant comments are welcome in this thread.
UPDATE: Over at the Cedar Rapids Gazette, Todd Dorman shared his perspective on Corbett's proposals. Excerpt:
Why would lawmakers from elsewhere care if Cedar Rapids gets a casino? Most don't.
But if they represent some of the 84 Iowa counties without a casino, they might like boosting their districts' share of casino revenues. It's the same formula Corbett and city leaders used to win approval for a program funding Cedar Rapids flood protection while also paying for projects across the state. They broadened its appeal. The smoke-free idea, for example, might bring health advocates into the fray.
At first blush, this seems like a plan existing casino operators would oppose, especially those who would lose business to Cedar Rapids. But multiple casinos would benefit from eliminating the tax on free-play promotions, both through lower taxes and the freedom to more aggressively market to players. More casinos would benefit from that tax reduction than would lose business to Cedar Rapids.
Could that reality split the casino cartel's Capitol clout? It's an interesting question. Throw in a moratorium that locks the market in place for a decade, and some casino interests may be willing to listen. [...]
But Corbett also needs to watch his homefront, where the "move on" chorus is becoming louder. I'm hearing from plenty of local folks who think the city should move to plan B and find another project or projects for the high-profile casino site. The mayor isn't ready to give up, but if his reform proposals go nowhere in 2015, even his allies may be urging him to fold.