The State Racing and Gaming Commission voted 4-1 this morning against allowing a new casino to be built in downtown Cedar Rapids. Last year Linn County voters approved a casino referendum by a 20-point margin. Even some opponents of the project believed its construction was inevitable, given the political connections of the group hoping to build in Cedar Rapids. However, today's vote is in line with the precedent of approving gambling licenses only where new casinos would not "cannibalize" from existing ones in Iowa. Four years ago, the Racing and Gaming Commission rejected applications for casino projects in Fort Dodge, Ottumwa and Tama County, despite public approval of all three plans. Multiple studies indicated that the Cedar Rapids casino would draw much of its business from Iowans who now visit casinos in Riverside or Waterloo.
I will update this post as needed with political reaction to today's vote. Although many Bleeding Heartland readers will be disappointed, I agree with economists who have argued that the "interior casinos" not near Iowa borders do not promote economic development. Meanwhile, new casinos incur significant social costs.
Already I've seen several Cedar Rapids residents asking whether the CEO of the Riverside casino will build the waterpark he promised last year, if Linn County voters rejected the casino project. Don't hold your breath.
UPDATE: In his report for the Cedar Rapids Gazette, Rick Smith noted that Cedar Rapids Mayor Ron Corbett "served in the legislature with three of the five members of the Iowa Racing and Gaming Commission." Former Iowa House Republican and Iowa Senate Republican Jeff Lamberti both voted no this morning. Dolores Mertz, who used to be the most conservative Iowa House Democrat, was the only commissioner to vote yes.
SECOND UPDATE: Further thoughts and more reaction are after the jump.