Iowa Governor signs two-year moratorium on new casino licenses; Cedar Rapids project now halted

Iowa Governor Kim Reynolds has signed into law a provision placing a moratorium on new casino licenses on Friday. The move implies a casino construction project for Cedar Rapids will not happen for at least two years. 

An amendment to a larger gambling bill means regulators cannot issue any new licenses in Iowa until June 2024, which affects a potential $250 million, 160,000 square-foot entertainment and cultural arts complex at the site of the now-demolished Cooper’s Mill near downtown Cedar Rapids.

The Legislature approved the two-year moratorium on new casinos earlier this year, taking action on a matter that has been traditionally conducted by the state’s Racing and Gaming Commission. The provision was inserted into House File 2497, a larger bill on Iowa gambling regulations. Senator Roby Smith from Davenport, a city that already has a casino, ran the amendment for the moratorium. 

Tiffany O'Donnell

As reported by The Gazette, Cedar Rapids Mayor Tiffany O’Donnell said she spoke to the governor, and referred to the signing of the bill into law as “a disappointing decision for me as mayor and for the city."

“I expressed to her my disappointment and reassured her that Cedar Rapids would still be here when the moratorium is lifted in two years. She encouraged us to stay the course as she and others pay attention to the gaming industry," O'Donnell said.

The Cedar Crossing Casino proposal calls for bars, restaurants, a 1,500-capacity entertainment center and other venues on F Avenue, along the west side of the Cedar River, between Kingston Village and Time Check Park. The project, near the Cedar River, would also incorporate a flood wall. 

“The city remains committed to bringing this world-class entertainment venue to Cedar Rapids. 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 to the city to work alongside the developer to get it done”, O’Donnell further stated, according to the cited source.

Rendering for the Cedar Crossing project

The new law jeopardizes Cedar Rapids’ third attempt to build a casino. The Iowa Racing and Gaming Commission had previously denied a gaming license to Linn County in 2014 and 2017, citing studies showing it would “cannibalize” revenues from other casinos.

Jonathan Sawin, President of Peninsula Pacific Entertainment -the preferred operating company for the project-, said last month when state lawmakers passed the moratorium that local investors believe that the outcome will be positive in the long run, and that the business remains committed to the project.

City Manager Jeff Pomeranz also said that Swain and the investors have “a very significant financial commitment” for this project. “At this time, the city has every intention of supporting the project and the investors by earmarking the property for a future casino development," he stated.

While the Iowa Gaming Association, which represents 19 state-licensed casinos, supports the moratorium, Reynolds’ decision seems to put her at odds with the five-member panel she appoints to regulate Iowa’s gaming industry.

Iowa Racing and Gaming Commission members expressed earlier this month their disappointment in the moratorium, and stated they felt the regulatory commission process kept politics out of the licensing decisions. 

Some Iowa lawmakers who opposed the moratorium feared it would give an opening for neighboring 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,” she concluded.