Operators of a Quad Cities casino have struck a deal which could lead to a reduction in donations to local charities if smoking is completely banned in Iowa casinos.
On Thursday, state regulators approved the new contract between the Rhythm City Casino and the nonprofit that holds the casino’s gambling license and distributes the casino’s charity. Mary Ellen Chamberlin is president of that nonprofit, which is known as the Riverboat Development Authority.
"If the smoking ban is extended to casinos, we have agreed to reopen our negotiations after a 90 day period to see what the effect would be on the casino," she says.
Iowa law stipulates that state-licensed casinos must make contributions to local charitable organizations and the Rhythm City Casino has been giving the nonprofit roughly $2 million a year to distribute to charity. Chamberlin says her nonprofit would consider agreeing to accepting less than $2 million if profits drop significantly.
According to Chamberlin, her nonprofit renegotiated its deal with the owners of the Rhythm City Casino because competition has increased in the Quad Cities market.
"Many of those changes are outside the control of either the casino or the nonprofit and so therefore we have accepted four points under which that $2 million may be waived or renegotiated," Chamberlin says. "And one of those is if an additional casino is built in either Scott or Rock Island County which would bring that market up to four boats. We are already a three-boat market."
Another trigger for changing the terms of the contract would be an outright ban on smoking in Iowa casinos. The Iowa Clean Air Act which took effect July 1st, 2008, banned smoking in most public places, but it does allow smoking on the casino floor.
Greg Seyfer, chairman of the Iowa Racing and Gaming Commission, rejects the idea other casinos will try to get similar deals that would reduce their charitable contributions if smoking is banned on the casino floor.
"Not that I’m aware of and I think this, by the terms, was ready for renewal," Seyfer says of the Rhythm City deal. "And so they just addressed certain issues that are relevant at this stage."
The Riverboat Development Authority was originally associated with The President Riverboat Casino in Davenport and since 1991 the nonprofit has distributed over $42 million in charity from The President and, for the past nine years, from the Rhythm City Casino.