Iowa Faces New Debate Over Gambling Expansion

Iowa’s gambling landscape may be entering another period of uncertainty, as locals in Cedar Rapids push back against a proposed casino development. The city, currently without a brick-and-mortar casino, could soon host its first — unless the activist group Iowans for Common Sense successfully halts the project. Their efforts may lead to a new state moratorium on land-based casinos, which could have far-reaching implications for Iowa’s online gambling future.

The debate centers on a proposal by the Linn County Gaming Association and Peninsula Pacific Entertainment to build Iowa’s 20th commercial casino in Cedar Rapids. The Iowa Racing and Gaming Commission (IRGC) is scheduled to vote on the proposal on February 6, 2025, but this decision could be delayed or overruled if the Iowa legislature acts first. Representative Bobby Kaufmann, a key figure in Iowa's gambling legislation, has reintroduced a bill to impose a new moratorium on the expansion of physical casinos. While this bill passed the Iowa House in 2024, it failed to gain traction in the Senate. Kaufmann, who was re-elected in November, plans to reintroduce the bill in the 2025 legislative session.

 

A Moratorium's Complex Impact on Iowa Gambling

The possibility of a new moratorium raises questions about the future of both physical and online gambling in Iowa. The last moratorium, which expired in June 2024, also served to freeze discussions around online gaming. If a new moratorium is enacted, it could similarly sideline the issue of regulated online casinos.

Advocates for online gaming see a potential upside to a land-based casino moratorium. By limiting the growth of the physical casino industry, they argue, the state could be better positioned to support online casinos as a revenue source. However, opponents of a new moratorium, including some casino industry stakeholders, fear that such a policy could stifle overall gambling growth and lead to further opposition against online casino legislation. Iowans for Common Sense, the group leading the charge against the Cedar Rapids casino, has launched a television ad campaign to gather support for a new moratorium. The group argues that allowing another casino would hurt local communities and is pushing for a petition to block the proposal. If successful, the group's actions could set the stage for wider conversations about online gambling in the state.

Supporters of online gaming believe that a moratorium on physical casinos could make space for online gambling expansion. The idea is that with fewer in-person casinos in Iowa, there would be less concern over “cannibalization” — the fear that online casinos could draw revenue away from existing physical venues. For legislators like Kaufmann, this could be an opening to push for regulated online casinos, which he has supported for years. However, his ability to convince Iowa’s physical casino operators that online gambling won’t undermine their businesses remains a key hurdle.

 

A new moratorium on land-based gaming licenses could limit the opportunity for the state to pull new revenues from such gambling. In that instance, online casinos could be ready to fill the void.

 

The Road Ahead: Iowa's Gambling Future

The tension between land-based casinos and the potential for online gaming expansion in Iowa hinges on complex dynamics. A new moratorium on physical casinos might pave the way for regulated online casinos, but it could also trigger resistance from casino industry groups wary of increased competition from iGaming. On the other hand, a decision to approve the Cedar Rapids casino could delay or complicate efforts to introduce online casinos, especially if concerns about market saturation gain momentum.

Ultimately, the state’s gambling future will depend on the actions of both lawmakers and voters in the coming months. While the fate of the Cedar Rapids casino will likely dominate the discussion for now, the broader issue of online gambling regulation in Iowa remains on the table, with key players like Kaufmann and Rep. Jacob Bossman likely to play pivotal roles in shaping the outcome.