Iowa lawmakers OK expansion bill

Amy Lorentzen

Tuesday, April 20, 2004 | 9:06 a.m.

DES MOINES, Iowa -- The Senate gave final approval Monday to a gambling bill that has been a central issue of the legislative session.

The bill, approved 37-11, now goes to Gov. Tom Vilsack for his signature.

The governor is expected to sign the proposal, which would allow the Iowa Racing and Gaming Commission to expand casino gambling in the state, setting no limits on the number of licenses that could be approved.

"I feel very comfortable putting this back in the hands of the Racing and Gaming Commission," said Sen. Mark Zieman, R-Postville, who managed the bill in the Senate. "All in all this a very fair, level-handed bill."

The bill establishes a new tax structure for casinos and implements new fees.

It requires the state's riverboats and Dubuque Greyhound Park and Casino to pay a tax rate of 22 percent. Prairie Meadows Racetrack and Casino in Altoona and Bluffs Run Casino in Council Bluffs would pay 24 percent unless they choose not to add table games.

The bill is the result of more than three months of wrangling over gambling.

Lawmakers were forced to take up the issue after the Iowa Supreme Court struck down the state's two-tiered tax on casinos as unconstitutional.

The state was left owing about $128 million in overpaid taxes and faced losing another $40 million in expected revenue over the next couple of years. The state is appealing the ruling.

Under the bill, the racetracks will continue to hold about $11 million of the back taxes in a special account, allowing the state to continue its appeal based on that amount.

To make up for some of the lost revenue next year, the racetracks would pay a total of $22.6 million toward the Rebuild Iowa Infrastructure Fund. The riverboats would pay a total of $30 million over two years, which would eventually be refunded through tax credits.

Millions more would be handed over to the state in fees charged to racetracks that implement table games such as poker and roulette.

The Senate on Monday approved two additional amendments attached by the House. One prohibits a riverboat casino from being built on the riverfront in downtown Des Moines. The other requires purses in horse races to be considered together and equally by the commission.

Sen. Dennis Black, D-Grinnell, said the legislation doesn't do anything to control the number of new casino licenses allowed in Iowa.

"This really leaves the door open," said Black, who voted to approve the bill.