Iowa Lawmakers Cite Sports Betting as Reason for Two-Year Casino Moratorium

Posted on: June 1, 2022, 08:15h. 

Last updated on: June 1, 2022, 09:51h.

Iowa lawmakers last week included a two-year moratorium on new casino licenses being issued. The rule was included in a gaming omnibus legislative package that primarily has to deal with regulatory matters.

Iowa casinos moratorium sports betting gaming
A welcome sign hangs over an interstate entering Iowa. State lawmakers want to halt new casino licenses for a two-year period to allow the industry to settle and stabilize in wake of COVID-19. (Image: Shutterstock)

The moratorium came as a surprise to many, including the Cedar Rapids Development Group which wants to build a $250 million casino resort on the west side of the Cedar River. Almost a week after the Iowa Legislature passed House File 2497 and sent the two-year license suspension to Governor Kim Reynolds’ (R) desk for final approval, state politicians are opening up about the decision to freeze new gaming privileges.

During an interview this week with Iowa PBS, Senate Majority Leader Jack Whitver (R-Polk) cited “gaming fatigue” for the moratorium.

People just said, ‘We want a pause and see how this shakes out over the next couple of years,'” Whitver explained. “Over the last few years there’s been a lot of changes to our gaming laws in the state of Iowa, and then there have been changes that will affect Iowa, like Nebraska bringing casinos on board.

“And so there’s a little, a lot, of gaming fatigue within the Capitol,” he added.

Sports Betting Blamed

The gaming omnibus the Iowa Legislature sent to Reynolds deals with cashless wagering, withholding of certain winnings, occupational licensing, simulcasting taxation, and updated penalties for regulatory shortcomings. Section 17 of the statute prohibits the Iowa Racing and Gaming Commission from issuing a 20th casino license for the next two years.

There are currently 19 licensed riverboat and land-based casinos in Iowa. House File 2497, assuming Reynolds signs the bill without amendment, will keep the industry that way until June 2024.

Along with casinos coming to Nebraska and new regulatory laws being implemented, Whitver says Iowa’s 2019 authorization of retail and online sports betting further added to the thinking that the state should slow down its growing gaming industry. The Senate majority leader says Iowans are already being bombarded by incessant sports betting advertisements.

“After the sports gaming bill passed, there’s so many ads, so much talk about gaming,” Whitver explained. “People said, ‘We just need to put a pause on this.'”

Along with halting new casinos, Iowa lawmakers tabled a request from sportsbooks to offer odds on esports.

Exceptions Possible

Should Reynolds sign the bill with the two-year moratorium on new casino licenses, the law would allow for certain exceptions amid the 24-month interruption. The statute provides three exceptions that would allow the state Racing and Gaming Commission to act on licensing requests.

The commission would be authorized to approve a casino’s request to relocate to a new site, so long as the location remains within the same county. The commission would also be permitted to approve new gaming rights for a company acquiring an active license from another firm, so long as the casino being purchased remains stagnant.

Finally, if a licensed casino operator surrenders its concession, the Racing and Gaming Commission would be allowed to initiate a competitive bidding process for a new company to take ownership of the shuttered property.