Board Will Discuss More Gambling In Iowa

DES MOINES — The debate over whether to expand gambling in Iowa moves this week to the state Racing and Gaming Commission, which will begin discussions Friday on whether to lift a 5-year-old ban on new riverboat casino licenses.


Commission Chairman Michael Mahaffey, a Montezuma lawyer, said he cannot predict what the five-member commission will do, but he added that Iowans should not expect a quick decision. It likely will be October before any “serious discussion” takes place or decision is reached, he added.


“We have to look at this situation,” he said. “From my standpoint, I think it makes it sense to be skeptical (about) lifting the moratorium to begin with. In other words, there needs to be a compelling argument and compelling reasons to do so.”


Iowans have made it clear they want to talk about it, Mahaffey said. “I haven’t had to make this many phone calls since I ran for Congress,” he joked. In the past three weeks, voters in Palo Alto and Worth counties have approved referendums by wide margins to allow gaming in their communities. In Dickinson County, voters were equally decisive in turning down gaming. As many as five other communities might consider a vote.


In eastern Iowa, Scott and Clinton counties have had riverboat gambling for more than a decade. Gov. Tom Vilsack has said he wants to see how all of the referendums turn out before he expresses any opinion to the commission, governor’s spokesman Matt Paul said.


Mahaffey and Jack Ketterer, the commission’s executive director, both say there likely will be a need for the Legislature to address broader policy issues, such as how much gambling should be allowed in the state.



He and other gaming officials, legislators, casino industry representatives and anti-gambling activists all say there are some key questions to be answered before a decision to grant new licenses is made. Many people involved in the issue agree on the questions, even if they disagree on what the answer should be:


Economic impact — Backers and opponents of gambling expansion, along with those who still are neutral, tend to agree that the commission needs to study the economic impact of more casino licenses.


“We recommended that we should look at allowing the industry to grow in areas that are under-served. And so that’s what really needs to be defined: what is under-served,” said Wes Ehrecke of the Iowa Gaming Association, which represents the casino industry.


Senate Minority Leader Mike Gronstal, D-Council Bluffs, who served on a panel that studied economic issues related to gambling earlier this year, said it is not the commission’s job to ensure the success of existing casinos. But, he said, it “makes sense for the commission to do a decent study of what the marketplace would bear.”


Robert Miller, an anti-gambling activist from Muscatine, agreed that a study should be done, but he urged commissioners to also look at the economic impact of problem gambling on families and communities.


“We would certainly support doing a complete economic study to determine whether expansion is good or bad for the economy and for the families of Iowa,” he said. “We already know it’s not good for the families, but we do need to study this issue before we expand it.”


Ketterer said concern about saturation of the state’s gaming market was one reason the commission approved the moratorium in the first place.


At the time, the panel was considering the state’s first riverboat casino on an inland waterway: the Lakeside Casino and Resort on West Lake in Clarke County. Knowing there are 35 lakes in the state larger than West Lake, commissioners realized they would have to face the possibility of many other communities wanting in on the action, Ketterer said. Some of those concerns remain today, he said.



Iowa law requires 0.3 percent of state lottery and gaming revenues go to the Iowa Gambling Treatment Program. The Legislature regularly shifts the funds to other programs, however. This year, $1.7 million out of a total of $3.4 million slated for gambling treatment was shifted to substance abuse and other addictive disorders.


“If we’re going to be in the forefront in terms of gambling as entertainment, I’d like to see us in the forefront of dealing with the problems,” Mahaffey said.


Frank Biagioli, the executive director of the Iowa Gambling Treatment program, said the advertising program for 1-800-BETS-OFF has been the biggest victim of the budget cuts. Advertising, especially television spots, is directly linked to how many people call the number and get treatment, he said.


In 1996, the state spent more than $1 million on television alone, and 1-800-BETS-OFF received almost 4,500 calls. In 2002, $162,000 was available for TV advertising and calls were down to about 1,500.


In addition, he said, the program likely will need to contract with a treatment center in north-central Iowa if casinos open in that area. Anyone in that region who needs help now has to drive to Fort Dodge or Waterloo.


Legislative debate — A host of gambling-related issues could end up waiting on the Legislature’s doorstep in January if the commission gets serious about lifting the moratorium.


Whether riverboats should have to continue cruising — a law that could disqualify some communities with shallow lakes and narrow rivers — is just one example of the related issues that only legislators can resolve, Ketterer said.


Sen. Jeff Lamberti, R-Ankeny, suggested this year that the state charge a fee for new licenses as a way to generate millions of up-front dollars for the struggling Iowa budget. That idea could resurface if new licenses become a possibility, gaming regulators say.


Rep. Scott Raecker, R-Urbandale, said he would like to reopen discussion of punitive penalties for underage gamblers, access to credit in casinos and the gambling-treatment issue. It is time, he said, “to get a lot of information and get people informed and have a good, honest, civil debate on the issues that are out there.”


Other lawmakers, however, including Senate Majority Leader Stewart Iverson, R-Dows, would prefer the commission decide what to do about the moratorium and limit legislative debate to gaming-tax issues.


“It is possible that we could end up having a gaming debate, and I don’t know what the outcome would be,” he said. “It could be very, very close.”