Iowa lawmakers approve two-year moratorium on new casino licenses, cashless gaming legalization

Iowa lawmakers have voted in favor of a two-year moratorium on new casino licenses, local media reports. The provision is part of a larger gaming bill that also legalizes cashless gaming, now headed to Gov. Kim Reynolds for signature, and would jeopardize a casino project in Linn County, where voters in the fall approved a referendum to that end.

The legislation, House File 2497, passed the Senate by a 35-11 vote and the House by a 60-23 vote on Monday, reports Des Moines Register. It would cap the number of state-issued licenses at the current number of 19, starting June 1 of this year, and expiring June 30 of 2024.

According to Rep. Bobby Kaufmann, R-Wilton, who chairs the House State Government Committee, the legislation seeks to preserve an “equilibrium” that currently exists in the number of gaming facilities around the state. The legislation seeks to keep new casinos from cannibalizing existing casinos’ revenue.

"The thing that most interests me is protecting the nonprofits that the casinos currently spend money on, which is in the tens and tens and tens of millions," Kaufmann said, according to the cited source. Given state casinos are required to donate a portion of their gaming revenue to organizations, the move is set to protect venues from lowering their contributions.

Rep. Bobby Kaufmann, R-Wilton

While the legislation has been met with both support and opposition from members of both parties in the House and the Senate, with some believing the state shouldn’t limit the current process for expanding the number of casinos, the most impacted stakeholder from this decision could be Linn County.

Leaders in the county have been looking to build a new casino in Cedar Rapids for some time now, and the vote has been described by KCRG as “a potential blow” to their plans. Linn County voters approved the option to build a casino in November 2021, after the state commission rejected proposals for a casino there in 2014 and 2017.

Rep. Kirsten Running-Marquardt, D-Cedar Rapids, has objected to the change. “This is incredibly unfair,” she said, according to Iowa Capital Dispatch. “People have been navigating and working with the gaming commission and now, all of a sudden, we see a moratorium pop up.”

Rendering for a Cedar Rapids casino proposed in 2017

In contrast, the bill’s sponsor, Rep. Shannon Lundgren, D-Dubuque, said the moratorium would give lawmakers an opportunity to consider the expansion of gambling in surrounding states before moving forward with any new casinos in Iowa. Kaufmann also defended the provision, stating a Cedar Rapids venue would eat into existing casino profits in eastern Iowa.

The bill was passed Monday by the Senate without debate and comes as part of larger gaming legislation that, in an earlier form, would have also legalized betting on esports. However, lawmakers removed that portion of the bill in an amended version, Des Moines Register reports.

The legislation also allows the state gambling industry to adopt cashless gaming. It would allow for individuals “to access a cash account through a personal electronic device for purposes of cashless wagering” on the gaming floor of the 19 licensees operating in the state. 

Casinos and their financial technology partners would be allowed to deploy cashless systems, as long as they introduce a number of safeguards, including a cooling-off period before a guest could reload their digital wallet, and the inclusion of the statewide telephone number for problem gambling information.