Voters to consider plan for Cedar Rapids casino


IOWA CITY, Iowa (AP) — Voters will decide Tuesday whether to support a casino in downtown Cedar Rapids after a campaign in which existing casinos sought to kill off new competition and backers trumpeted the benefits for Iowa's second largest city.

The Linn County vote offers the public a voice amid talk in several communities of expanding Iowa's $1 billion casino gambling industry. If voters say yes, developers would begin the task of seeking to persuade the Iowa Racing and Gaming Commission to approve the first license for a new casino since 2010.

A key question for voters and regulators will be whether Iowa already has enough gambling with its 18 state-licensed casinos. In other words, would a casino in the city of 128,000 add economic value without harming the existing ones nearby?

"The vote is supposed to be very close either way," said Wes Ehrecke, president of the Iowa Gaming Association. He said business at Iowa casinos has been "flat at best" in recent years, but the industry still generated more than $405 million in tax revenue last year.

The state commission suggested in 2010 it wanted to wait 3 to 5 years before considering applications for new licenses, citing concerns about market saturation. With the self-imposed moratorium set to expire, interest in new casinos appears to be picking up. Supporters last month proposed a casino in Warren County, just south of Des Moines, and are pushing for a referendum on it that's sure to face opposition from nearby casinos.

A group of Cedar Rapids investors is pledging to spend $80 million to construct a casino along the Cedar River, near the city's new convention and events center complex. Supporters say the plan would add another element to the city's ongoing rebuilding after the 2008 flood, creating jobs and millions in revenue for government services and charities.

But critics say the plan would siphon business away from the casino in Riverside, 35 miles south of Cedar Rapids, and others in Waterloo, Dubuque, and Tama.

No one has been more outspoken than Riverside Casino and Golf Resort CEO Dan Kehl, who says a Cedar Rapids casino would devastate his business. His casino is spending $1.5 million to fund the "Vote No" campaign, which has run television ads calling the plan a sweetheart deal. The Isle Casino in Waterloo has pledged $150,000 to Kehl's effort.

Adding a late surprise to the campaign, Kehl announced Friday he intends to build a $30 million waterpark in Cedar Rapids — but only if voters reject the casino plan.

Sam Roecker, a political consultant running the "Vote No" campaign, said the move gave voters a clear choice "between a casino and a family-friendly indoor waterpark."

But Mayor Ron Corbett, a supporter of the casino, dismissed the proposal as "a last-minute ploy" and said the city could end up with both developments. He said the casino would generate property taxes, create business for a nearby city-owned hotel and retain gambling money that currently goes to other casinos.

Corbett thinks this plan is better than one in 2003 for a riverboat in Cedar Rapids, which was narrowly rejected by voters. He said he's expecting another close vote Tuesday.

If approved, Corbett said he expected the city to compete against others seeking new casino licenses and continue to face intense opposition from existing operators. But he said the city would argue that more competition is good for gamblers.

"It's not going to be a slam dunk by any means. We're going to have to put together a good case," he said.

Marcia Rogers, a spokeswoman for Vote Yes Linn County, said a majority vote would allow developers to finalize location and design plans as part of the application for a license. She said the casino would create 600 construction and casino jobs and generate up to $4 million annually for charities, which are guaranteed a 3 percent cut of casino revenues under Iowa law.

"Our local developers would not be driving this forward if they didn't think this could be a viable entity all in its own," she said.

Iowa Racing and Gaming Commission Administrator Brian Ohorilko said commissioners would likely order a market analysis to determine how a Cedar Rapids casino would impact existing operators. Commissioners would ultimately consider a range of criteria spelled out in Iowa law to determine whether to grant a license, including a casino's impact on jobs and tourism, he said.

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