A key Democrat in the Iowa Legislature says lawmakers should “come back and fix” the controversy of gambling taxes. The U.S. Supreme Court ruled this week that Iowa’s system which taxes race track casinos at a higher rate than riverboat casinos is perfectly legal under the U.S. Constitution, and now the Iowa Supreme Court must decide whether the system violates the state constitution. Senate Democrat Leader Michael Gronstal of Council Bluffs, a city that has a race track and floating casinos, says legislators should have resolved the controversy themselves. Gronstal says lawmakers had an opportunity during the regular and special legislative sessions this year to pass a compromise that reduced the tax rate for the tracks, but preserved the level of state gambling taxes. That compromised passed the House, but was never taken up in the Senate, and Gronstal says Republicans who run the Senate made a mistake.Gronstal says legislators should not wait for the Iowa Supreme Court to rule, and should have a “special session” this summer to address the matter. He says the downside potential for the state is significant as they could end up owing the tracks millions of dollars. Gronstal says the tax matter should be the only gambling issue discussed in a special session.Gronstal says other issues, like changing the law that requires the riverboat casinos to go on regular cruises, are too controversial to develop a consensus within the legislature as too many lawmakers, according to Gronstal, oppose any move that would expand gambling in Iowa. Cedar Rapids leaders are now talking about holding a referendum and applying for a state license to operate a new floating casino on the Cedar River. Gronstal expects the state Racing and Gaming Commission to reconsider its moratorium on new gambling licenses, which would open the door for Cedar Rapids. Gronstal says gambling is a reality in this state, and there are some “underserved markets” like Cedar Rapids.Gronstal says, though, the cruising requirements for a gambling boats may make it difficult for cities like Cedar Rapids and Des Moines to find a waterway that would allow a gambling boat to motor up and down a river.
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