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Commission Approves New Casino License for Lyon County PDF Print E-mail
Commentary/Politics - Iowa Politics
Written by Lynn Campbell   
Friday, 14 May 2010 22:40

The Iowa Racing & Gaming Commission decided Thursday that the state is ready for one more casino -- not four -- and commissioners said they don't believe the issue will be addressed again for three to five years.

Lyon County will be the home of Iowa's 18th state-regulated casino, and the 20th overall when including the state's two Native American casinos. Licenses for casinos in Tama, Wapello, and Webster counties were turned down, with commissioners citing financing problems and the likelihood of pulling business from nearby casinos in voting against those licenses.

In approving the license for a Lyon County casino, commissioners said it would provide the biggest upside for the state with the least risk of cannibalization of other Iowa casinos' profits. The casino's proximity to Sioux Falls, South Dakota, and its distance from existing casinos were important considerations as well.

"Lyon County was projected to have over 80 percent of its revenue by out-of-state customers," said Commissioner Paul Hayes, an Urbandale Republican. "All other counties were projected to have less than 10 percent."

Lyon County was the heavy favorite throughout the year-long process to determine whether to award a new Iowa casino license for the first time since 2005. Two statewide studies on Iowa's gaming market released in May 2009 by GVA Marquette Advisors and The Innovation Group pointed to the potential of Lyon County in extreme northwest Iowa, which would tap the Sioux Falls market.

A major concern for legislators in denying an application for Webster County was the proposed casino's proximity to the Wild Rose Casino & Resorts in Emmetsburg and Prairie Meadows in Altoona.

Commissioner Kate Cutler, a Council Bluffs Democrat, said being in the middle of the state would mean pulling people from those and other casinos. "In the matter of a year or two it would most likely put Wild Rose out of business," she said.

Cutler said the major issues in Tama and Wapello counties were the sources of funding and the prospect of cannibalization. She said the funding source for the Wapello County casino changed last week, which was well past the January deadline the commission set for the Department of Criminal Investigation to perform background checks.

Ken Mimmack, president and CEO of Ingenus of Iowa and the developer of the Wapello County project, said he believes criteria such as cannibalization, firm financing-commitment letters, and consideration of what's happening to other casinos in the state made the bar to receive a license hard to clear.

In a prepared statement released after the decision, Governor Chet Culver said he and Lieutenant Governor Patty Judge "pledge to do everything we can to assist communities in Webster, Wapello, and Tama counties with their job-preservation and -creation efforts, now and in the future."

Executive Council Approves Special Prosecutor

With a voice vote, the Executive Council voted 3-0 late Monday afternoon to appoint attorney Lawrence Scalise as a special prosecutor to complete a criminal investigation of alleged improper campaign contributions from Fort Dodge gambling interests to Culver's re-election campaign.

Deputy Attorney General Julie Pottorff explained that the appearance of a conflict came when Donn Stanley took leave as a division head in the attorney general's office to manage Culver's re-election campaign. She said Scalise will charge the state $80 an hour for the investigation, which she described as "an incredible bargain for an attorney of his caliber." She said payments will be made from the state general fund.

Agriculture Secretary Bill Northey questioned whether there would be a limit to how much time and money will be spent on the investigation, or when it would be complete. Pottorff said there is no limit, and that's up to Scalise. But she said she'd update the Executive Council on costs as the investigation continues. "You'll see the bills as they come in," she said. "Those come in monthly."

Only Northey, a Republican, and Secretary of State Michael Mauro, a Democrat, attended the meeting; Culver participated by telephone. Culver did not weigh in on the issue, but also did not recuse himself from the vote. State Treasurer Michael Fitzgerald and State Auditor David Vaudt were absent.

Culver Chief of Staff Jim Larew maintained Monday that Culver's office is not at the center of the investigation, and that Culver acted properly when he advocated for the Iowa Racing & Gaming Commission to approve four new casino licenses, including the one in Fort Dodge.

"I think it's a big public policy issue that Iowa voters want to know about," Larew said of expanded gambling. "And the longstanding tradition has been, since Governor Branstad first promoted the opening of casinos, that persons either occupying the governor's chair or running for governor have offered opinions one way or another whether we should have more casinos, less casinos. That's an open public debate."

Larew said that because Culver was asked privately about his position on an expansion of gambling, "rather than have it be a private answer, he would offer it to the public as to what he thought the best policy was and they could take it one way or the other, agree or disagree."