Iowa House votes restriction on gambling credit

Tuesday, March 24, 1998 | 1:35 a.m.

The measure would limit the state to 10 floating casinos and three racetracks for the next five years and also would prohibit the expansion of existing gambling facilities by banning the addition of more slot machines.

There have been efforts to add more slot machines at the Prairie Meadows Racetrack and Casino in Altoona.

The House approved the measure on a 97-0 vote, returning it to the Senate where a similar version already has won approval. It is likely to get final legislative approval; Gov. Terry Branstad asked lawmakers for the five-year moratorium.

The move marks a reversal of a 16-year trend since parimutuel betting was approved in the state in 1983.

Since that time, there has been a steady expansion of the legalized gambling industry, and restrictions moving through the Legislature this year mark the first attempt to scale back gambling.

"We've reached the saturation level," said Rep. Steve Churchill, R-Johnston.

The biggest fight was over banning the use of credit card machines, which can be used to obtain a cash advance from a credit card account. The Senate-passed version would have moved those machine off of the casino floor, but the House voted to remove them entirely.

"Bankruptcies are up 34 percent from last year," said Rep. William Witt, D-Cedar Falls. "If we can take the credit card machines out of these casinos ... we will be doing at least a small thing toward reducing the overall losses and reducing the losses to our family and our economy."

Critics argued that the state has a gambling industry in place and makes more than $100 million a year in profits. It makes little sense to make it inconvenient for those wishing to gamble, critics argued.

"It really hurts the tourism industry," said Rep. Rick Larkin, D-Fort Madison. "I don't believe it will help with the compulsive gambler."

Gambling foes argued that compulsive gamblers get in trouble when they get carried away with the moment and plunge themselves deeper in debt using a handy credit card machine.

Moving the machines out of a casino would make it less likely that a gambler will run up a big debt on the spur of the moment, said Rep. Steve Sukup, R-Dougherty.

"The casino industry plays on their desire for quick gratification," Sukup said.

The House voted to ban credit card machines on a voice vote. The ban does not apply to electronic transfer machines where a debit card is used to take money from a bank account.

The same machines are used to withdraw money from a bank account using a debit card and obtain a cash advance from a credit card. Sukup said it is possible to adjust the machines so they cannot be used with a credit card.

The House-passed measure does not change the use of debit cards, which are still allowed.

Sukup said that it is time to begin slowing an industry that was initially sold to lawmakers as family entertainment with a $2 betting limit.

"When Iowa legalized gambling, it was brought to us as an entertainment industry," Sukup said.

But gambling supporters said the legalized gambling industry has brought jobs and income to the state.

"Gambling isn't going to go away," said Rep. Michael Cataldo, D-Des Moines. "There's a demand out there."

With the completion of a just approved casino in Osceola, the state will have 10 casinos. There also are three casinos operating on American Indian reservations, which lawmakers are unable to control. There are about 12,000 slot machines in the state.

There are racetracks at Council Bluffs, Altoona and Dubuque, while a track went bankrupt in Waterloo. Lawmakers sought to craft a loophole which would allow an election on putting slot machines at that track and reopening the facility, but that was rejected.

Voters in Black Hawk County have twice rejected referendums which would have allowed slot machines.

The shift in sentiment on gambling issues is twofold. Gambling critics argue there is now clear evidence of the social ills caused by gambling through issues like an increase in compulsive gambling.

In addition, many gambling backers favor the moratorium to head off any competition for existing casinos.