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Iowa just emerged from a two-year moratorium on gambling expansion and might be headed straight into another one, as locals oppose the construction of a new retail casino in the state’s second-most-populous city.
Cedar Rapids is currently without a brick-and-mortar casino. That’s slated to change, unless a newly-formed activist group achieves its goal of preserving the status quo.
Iowans for Common Sense aims to block the Cedar Rapids casino proposal and is pushing for a new moratorium on the expansion of land-based casinos in the state. If that effort proves successful, that could set the stage for more conversations in Des Moines about expanding online gaming to include regulated online casinos.
It’s unclear whether a new moratorium on physical casinos in Iowa would be a net negative or positive for online casino regulation in the state. The last moratorium also served to preempt any discussion of online gambling while it was in effect, and the new one likely would as well. However, limiting the number of stakeholders in the state’s retail industry could have some long-term upside for iGaming’s chances.
Iowans for Common Sense launch ad campaign
According to Amanda Rooker of KCCI, the activist group Iowans for Common Sense has initiated a television ad campaign in Cedar Rapids and the capital of Des Moines. The video asks Iowans to support a petition calling for a new moratorium on land-based casinos licenses in the state.
The last moratorium expired on June 30, 2024. In the wake of that expiration, investors have submitted a proposal to develop Iowa’s 20th commercial physical casino in Cedar Rapids.
Iowa’s regulatory body for gambling, the Iowa Racing and Gaming Commission (IRCG), will vote on whether to grant the applicants, the Linn County Gaming Association and Peninsula Pacific Entertainment, a gaming license. Currently, the IRCG plans to hold that vote on Feb. 6, 2025.
Unless the Iowa legislature acts first. There is a chance that could happen.
Bobby Kaufmann reelection prompts moratorium bill
In the 2024 regular session of the Iowa legislature, Rep. Bobby Kaufmann submitted an amendment to a bill that would have restored the expired physical casino license moratorium. The bill cleared the Iowa House of Representatives but did not come up for a vote in the Iowa Senate.
Nonetheless, Kaufmann won reelection and has committed to re-introduce the bill in the 2025 session. If the Iowa legislature approves it before Feb. 6, that would obviously make the IRGC’s plan to vote on a license for a Cedar Rapids casino moot.
The 2025 session does not begin until Jan. 13, 2025, so that’s a short timeline to head off the licensing vote. However, with support in the Iowa House seemingly in place, garnering support in the Iowa Senate is feasible.
While the speed with which the Iowa legislature moves on this issue could decide the fate of a casino in Cedar Rapids, there are deeper implications. Kaufmann is the connection between a land-based casino moratorium and the expansion of online gaming in Iowa.
Kaufmann’s role in online gaming legislation
It’s difficult to find a more active proponent of regulated online gambling in Iowa than Kaufmann. Kaufmann was the original sponsor of the bill that legalized sports wagering in the state in 2019 and he filed a bill to regulate online casino play in 2021, 2022, and 2023.
Kaufmann has not yet shared whether he will introduce an online casino bill in 2025. He might not have to, as Rep. Jacob Bossman might propose such a bill instead.
A new moratorium on land-based gaming licenses could be an aid or a hindrance to such legislation. Currently, the room is a little difficult to read.
The issues surrounding online casino regulation in Iowa
One of the biggest current obstacles to regulating online casino play in Iowa is a lack of uniform support from the state’s brick-and-mortar casino licensees. Some licensees are concerned that could mean a decline in their businesses.
At the same time, friendly conversations to online casino legislation have focused on creating new revenue streams for the state. Those two issues are a perfect example of how the impact of a casino moratorium is hard to predict.
The optimist view of a moratorium
If a moratorium on land-based gaming expansion goes into effect, that limits the opportunity for the state to pull new revenues from such gambling. In that instance, online casinos could be ready to fill the void.
Additionally, a moratorium could lessen the furor of the cannibalization concerns. With fewer gaming licensees to convince, that task wouldn’t get taller.
The glass half-empty take on the situation is just as valid at this juncture, though.
The pessimist view on the moratorium
Currently, there’s no guarantee that activist groups like Iowans for Common Sense wouldn’t be as opposed to the expansion of online gaming as they are to the proliferation of brick-and-mortar gaming. A win in the enactment of a new moratorium could inspire such groups to further action.
Furthermore, there’s a potential “sour grapes” effect. Entities like the current applicants for the Cedar Rapids casino license might spur anti-online casino sentiments in retaliation for losing their opportunity.
That could further entrench cannibalization concerns for current physical casino licensees, as opponents might tie the moratorium and online casino legislation together, suggesting that the moratorium itself is evidence of such cannibalization.
Addressing those concerns would be simple. A simple sales pitch doesn’t guarantee a desired response, though.
The path to online casino legislation in Iowa
For Bossman and Kaufmann, getting all Iowa casino licensees on board with online casino expansion is a dollars and cents conversation. Proponents need to convince skeptics that their cut of online casino revenues would match if not exceed any action they might lose from the availability of regulated casino apps.
The premise of a Cedar Rapids casino could act as a good counterargument in that interest. Cedar Rapids is fewer than 40 miles from Riverside, Iowa, where an existing land-based casino operates. Other casinos are within a two-hour drive of Cedar Rapids in Iowa.
Although a physical Cedar Rapids casino and online casino expansion aren’t zero sum outcomes, the argument could be made that a casino in Cedar Rapids would represent greater cannibalization than iGaming would. Comparatively, there has been less pushback against in-person gaming in Cedar Rapids.
At this time, the future of in-person gaming in Cedar Rapids is more tangible than Iowa online casinos. That fate could impact online casinos’ destiny in Iowa, though.
