Consultant identifies best expansion sites

David Pitt

Thursday, Oct. 9, 2003 | 9:32 a.m.

DES MOINES, Iowa -- The commission that regulates gambling in Iowa may choose to let state lawmakers decide whether any new gambling licenses should be allowed.

With three Iowa counties approving riverboat casinos and three more scheduled to hold referendums before the end of the year, pressure is mounting on the Iowa Racing and Gaming Commission to lift the five-year moratorium on gambling licenses.

"Some thought at least this is an issue to go to the Legislature for them to decide," said commission member Kate Cutler, a corporate attorney from Honey Creek. "This may be really an issue that has such impact statewide -- even though we're talking about limited licenses, if it's lifted -- that is bigger than the commission."

Commission Chairman Michael Mahaffey, of Montezuma, said the commission could make a decision at its Nov. 20 meeting or defer the issue until the Legislature meets to see if lawmakers would like some input.

House Speaker Christopher Rants, R-Sioux City, said he was dumbfounded by the idea.

"That's what we have a Racing and Gaming Commission for," he said.

Lawmakers might decide to take the commission out of the process altogether and decide themselves where new riverboats should go and other key issues. In that case, lawmakers likely would feel duty-bound to approve licenses for their own communities.

"How that will play out is anybody's guess," Rants said.

Voters in Palo Alto, Worth and Black Hawk counties have approved new riverboats and Wapello, Linn and Clay have referendums scheduled. Two northern Iowa counties -- Cerro Gordo and Dickinson -- rejected proposed riverboat casinos.

Legislative leaders have resisted a broad debate on gambling because of its divisive nature.

"If the Racing and Gaming Commission says the Legislature should talk about it, we'll take a look and we'll talk about it," said Senate Majority Leader Stewart Iverson, R-Dows.

The commission decided earlier this year to postpone a decision until it had reviewed the results of a consultant's study. The report, by Cummings Associates, of Arlington, Mass., will be presented to the commission today.

It gives ammunition to both sides of the gambling expansion argument.

The report concluded that new casinos could attract millions of dollars to the state and local communities. The downside is that any new casino would siphon revenue from existing gambling operations.

The report said new casinos in the Cedar Rapids and Waterloo areas would best add revenue without hurting current riverboats. If casinos were licensed in both Black Hawk and Linn counties, they would net more than $148.9 million combined and take about $20 million in business away from existing casinos, including Dubuque, Marquette and the Quad Cities.

Establishing boats in smaller markets could generate additional casino revenue, although much less than in bigger markets.

Ottumwa would pull in an estimated $20 million; Emmetsburg, $15 million; Fort Dodge, $23 million; Franklin County, $17 million; and Worth County, $21 million.

The report said a new casino in Des Moines would draw $132 million a year but would cost Prairie Meadows $60 million a year, about 40 percent of its current revenue.

The state has 10 riverboat casinos and three casinos at racetracks, plus three Indian casinos.

The moratorium on casino licenses was adopted in 1998 because of state regulators' concerns that Iowa's gambling market was becoming saturated.

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