Casinos: Commercial Casinos - Iowa

Gambling was outlawed in the state of Iowa from the time of its statehood in 1846 until 1972, when a provision in the state constitution prohibiting lotteries was repealed. In 1973 the general assembly authorized bingo and raffles by specific parties. A decade later in 1983, pari-mutuel wagering at dog and horse tracks was legalized. A state lottery was authorized in 1985. In 1989 gambling aboard excursion boats was authorized for counties in which voters approved gambling referendums. Between 1989 and 1995 referendums authorizing riverboat gambling were approved in more than a dozen counties. The Iowa Racing and Gaming Commission granted licenses allowing river-boat gambling in ten counties: Clarke, Clayton, Clinton, Des Moines, Dubuque, Lee, Polk, Pottawattamie, Scott, and Woodbury. By law, the residents of these counties vote every eight years on a referendum to allow riverboat gambling to continue. In 1994 pari-mutuel racetracks were permitted to operate slot machines.

In 2003 there were ten riverboat casinos and three racetrack casinos operating in Iowa. As stated in the Iowa Racing and Gaming Commission 2003 Annual Report, admissions were 12.7 million to the riverboats and 6.7 million to the racinos. The riverboats are required by law to meet space requirements for nongamblers and to provide shopping and tourism options. Slots are allowed at racetracks only if a specific number of live races are held during each racing season. The renewal or extension of a particular gambling license is decided by referendum every eight years.

As shown in Figure 4.6 total adjusted gross revenues during calendar year 2003 topped $1 billion for the first time. This was a 5% increase from the year before. During 2003 casino revenues accounted for 68% of the total, and racino revenues accounted for 32%. According to 2004 State of the States: The AGA Survey of Casino Entertainment,

FIGURE 4.6

nearly $210 million was collected in city, county, and state taxes. Iowa's gaming tax rate ranges from 5% to 20% depending on revenue. The city and county each get 0.5% of this amount. Another 0.3% goes to gambler treatment programs, and the remainder goes to designated state funds.

Allocation of tax revenues collected by the state is dictated under Iowa Code section 8.57(5)(e). Beginning in the fiscal year extending from July 1995 through June 1996, the first $60 million in tax revenues collected by the state from all casinos was allocated to the state's general fund. Revenues in excess of that amount were allocated to the Rebuild Iowa Infrastructure Fund. Beginning in the fiscal year extending from July 2000 to June 2001, revenues in excess of $60 million were allocated to the Vision Iowa Fund, the School Infrastructure Fund, and the Rebuild Iowa Infrastructure Fund. The Vision Iowa Fund is used for recreation, education, entertainment, and cultural projects. According to the Iowa Gaming Association, in fiscal year 2004, gaming revenues topped $240 million, with appropriations going to the general fund ($60 million), Vision Iowa Fund ($15 million), School Infrastructure Fund ($5 million), gambling treatment ($3 million), Endowment for Healthy Iowans ($70 million), local city and county taxes ($10.5 million), Rebuild Iowa Infrastructure Fund ($41.6 million), and the Environment First Fund ($35 million).