In July of 1995, the Racing and
Gaming Commission denied an application for a license to operate gambling games
on a riverboat on West Lake in Clarke County near Osceola in rural southern
Iowa. This application was the
first the Commission had received for an excursion boat on inland waters.
All previous applications were for sites on the Mississippi and Missouri
The Commission engaged Cummings
Associates to conduct a study. The
study showed there was still unmet demand for casino games in the Des Moines and
Cedar Rapids/Iowa City metropolitan areas and marginally in the northwest
quadrant of the state.
In 1997 the Commission expressed
concern to the governor and the legislature about the number of additional
licenses Iowa could accommodate.
In the 1998 General Assembly, the
legislature passed Senate File 2320 – A bill for an act relating to gambling
by imposing a moratorium on new licenses to conduct gambling on excursion
gambling boats and at pari-mutuel racetracks with gambling games, limiting the
location of future excursion gambling boats, prohibiting gambling licensees from
allowing the loaning of money by credit card or other electronic means for
gambling purposes, and imposing a scheduled fine for gambling by persons under
twenty-one years of age. (Formerly SSB
On May 20, 1998, then Governor
Terry Branstad vetoed Senate File 2320. The
Governor disagreed with language in the bill unrelated to the moratorium.
On May 21, 1998, due to the
failed legislation, the Iowa Racing and Gaming Commission noticed for intended
action the following administrative rules, essentially the same language
addressing the moratorium issue contained in the bill.
491--1.6(99D, 99F) Limitation
on location and number of racetracks and excursion gambling boats.
number of licenses to conduct horseracing shall be one for a racetrack located
in Polk County. The number of licenses to conduct dog racing shall be two, one
for a racetrack located in Dubuque County and one for a racetrack located in
Pottawattamie County. The total number of licenses issued to conduct gambling
games on excursion boats shall not exceed ten and shall be restricted to the
counties where such boats were operating (or licensed to operate in the future)
as of May 1, 1998.
sub rule 1.6(1), with the approval of the commission:
a. A licensed facility may be
sold and a new license may be issued for operation in the same county.
b. A licensee may move to a new
location within the same county.
c. If a license is surrendered,
not renewed, or revoked, a new license may be issued for operation in the same
July 7, 1998, a public hearing was held on the proposed rules.
September 16, 1998, the rules became effective.
June 12, 2002, the Iowa Supreme Court reversed a district court decision and
held that different gaming tax rates for excursion boats and racetracks was in
violation of the equal protection clause of the Constitution and was therefore
unconstitutional. The tax rate for
the racetracks reverted from 32% to 20%.
December of 2002, Governor Tom Vilsack appointed a task force to study ways to
recoup the $40 million in lost revenue to the state due to the Supreme Court
task force hearings, the Iowa Gaming Association suggested lifting the
moratorium on new licenses as an alternative to raising gaming taxes for
excursion boats and racetracks to 24-25% as a means of recapturing lost revenue
to the state.
was introduced in the 2003 General Assembly calling for three additional gaming
licenses. Several Iowa communities
began mobilizing efforts to secure one of the licenses.
Even though the bill was never brought to a vote or even debated, several
Iowa counties scheduled referenda to approve excursion boat gambling.
At a July 18, 2003 meeting, the Commission considered the issue of whether or not to lift the moratorium on new licenses. This followed referenda in two counties approving excursion boat gambling. The Commission voted to engage Cummings Associates to perform a study. The study would not be for the purpose of making a decision for the Commission. The study would look at areas of unmet demand for casino gambling, areas currently interested in licenses, and the impact on existing licensees if licenses were issued in those areas. These are not the only areas that will be considered when the Commission makes their decision, but will provide some information on the relative benefits versus risks of removing the moratorium.
Will Cummings appeared at the October 9 Commission meeting in Dubuque to review the study and answer questions. Copies of the study are available in the Commission office and can be downloaded from the Commission website.
On November 20, the Commission met at the Foxboro Business and Conference Center in Johnston. After listening to interested parties for two hours, the Commission members expressed their views on the moratorium issues. Subsequently, the Commission passed the following motion on a 5-0 vote: Commissioner Hamilton moved to leave the moratorium in effect, with the stipulation that the Commission may be willing to reconsider this position if the legislature provides the Commission with additional guidance and direction in the areas of the cruising requirement, defining lakes and reservoirs for the purpose of accommodating excursion boats, a maximum number of excursion boats and how the Gamblers Treatment Program will be funded. Commissioner Jarding seconded the motion.
General Assemble passed House File 2302 in May 2004. This
comprehensive bill reformed gambling laws in Iowa. The bill addressed
those areas in which the Commission sought guidance and direction, except
for the maximum number of excursion boats. House File 2302 was silent
on this issue.
On November 10, the Commission received ten applications for new excursion gambling boat licenses and at the November 19 Commission meeting a timetable for a review and evaluation process was announced.
On July 14, 2005, the Commission discussed the possibility of reinstating the moratorium rule on additional excursion gambling boat licenses and racetrack enclosure licenses. It was the feeling of the Commission that they did not want to reinstate a moratorium rule, however, each Commissioner expressed their opinion that while not wanting to reinstate a moratorium rule, they were not inclined to issue any additional licenses until the four new licensees were built and operating results could be evaluated.