The Iowa Supreme Court says state regulators can consider the economic impact when awarding new gambling licenses, and there’s no automatic requirement for issuing a license to a county that wants one.
Cedar Rapids lawyer Eugene Kopecky sued the Iowa Racing and Gaming Commission after they voted against awarding a gambling license to Cedar Rapids in 2014. Kopecky argued the IRGC must approve a license once a county gambling referendum passes, and said the commission should not have made its decision based on the economic impact on existing casinos.
The Iowa Supreme Court ruling says the Racing and Gaming Commission is not required to issue a license just because a gambling referendum passes. The ruling considered the language used by lawmakers, which says the IRGC “may” issue a license in a county that approves a referendum. The ruling says that is key because: “If the legislature intended to impose a duty on the commission to issue a license following an affirmative referendum, it would have used the word “shall,” as it did to impose a duty on the commission to not issue a license to conduct gambling games in a county in which the majority of voters disapprove a referendum for gambling games.”
The Supreme Court also ruled against Kopecky on the second point as well. The ruling says the legislature’s requirement that nonprofit license holders give at least three percent of gross profits back to the communities is evidence lawmakers deem the economic impact of casinos “is an important function of legalized gambling.” It says
“in order to insure the continued economic development of our state, the legislature and the commission deem it important to make sure an existing gambling facility remains viable when the commission issues a new license. A closed gambling facility, together with a loss of jobs, has an adverse effect on economic development in our state. ”
The ruling settles the question in the 2014 action by the IRGC and could have an impact on upcoming action as well. Three new proposals for casinos in Cedar Rapids have been presented in to the commission and the regulators are reviewing proposals from 6 companies to conduct another market study on gambling that focuses on the impact of a new casino in Cedar Rapids.
Here’s the full ruling: IRGC ruling PDF
Here are some related stories:
State regulators approve statement on Cedar Rapids casino
Gaming Commission hears challenge of Cedar Rapids casino decision