Chance of gambling bill's passage dims; lawmakers cite impropriety in plan to generate millions

Iowa lawmakers have backed away from plans that would have generated tens of millions if not hundreds of millions of dollars for the state through gambling proposals, two legislators key to the discussions revealed Friday at an IowaPolitics.com forum.

A plan that would have allowed greyhound tracks to stop racing if they paid the state an exemption fee has been sent to a "kill committee," while a working group of lawmakers has removed the idea of an "opt-in fee" for casinos to avoid referendums and a key lawmaker predicted only a 20 to 25 percent of passage for the whole package of gambling proposals.

"I'd give it maybe one chance in four, 25 percent, 20 percent, that this happens," said Rep. Doug Struyk, R-Council Bluffs. "It's going to be a tough lift. It depends on if we have an opportunity to reasonably educate individuals and avoid the knee-jerk reaction of Internet gambling and we actually look at what we're trying to do not only with Internet gambling, but with the list of items. Perhaps we throw Internet gambling overboard."

Gambling proposals being considered by the Legislature this year include legalizing and regulating online poker tournaments within the state, sports betting, allowing some casinos to avoid referendums, ending greyhound racing if racetracks pay the state a fee, allowing casinos to take a portion of the wagering from telecast horse and dog races, and allowing casinos to purchase an off-floor gaming license for poker tournaments.

One of the proposals with the greatest revenue-generating capacity is Internet gambling, but even that is only expected to raise $11.5 million in the first year, rather than the $80 million that's currently being wagered. Struyk said the rest of the package is only expected to generate about $1 million to $2 million.

Struyk, one of eight lawmakers working on the proposals, said if Internet gambling is removed from the bill, that would probably improve the bill's chances of passage by 10 to 15 percent.

A proposal that would have allowed casinos to pay an "opt-in fee" to avoid a referendum this November and a proposed "exemption fee" that would have allowed greyhound tracks to stop racing have been taken off the table because of the appearance of impropriety.

"They've called it 'pay to play' and I have yet to talk to a legislator who thinks 'pay to play' is an appropriate way to accomplish that," Struyk said. "If we want to have referendums moved to only subject to reverse referendum after they've been passed twice, then let's vote on that. Let's not look at it and say, 'Well, if you give us ... $500,000 per license that you'd be able to do it. I really think that looks bad and reflects poor on the state."

Bluffs Run Greyhound Park in Council Bluffs had offered to pay the state $10 million a year for seven years, for a total of $70 million, for the ability to stop racing greyhounds. Under the initial legislation, Mystique, formerly called the Dubuque Greyhound Park and Casino, would have also been able to discontinue live dog races if it paid a "racing exemption fee."

Rep. Mary Mascher, D-Iowa City, chairwoman of the House State Government which tackles gambling issues, is a big proponent of ending greyhound racing. She said there's waning interest in dog tracks. But she said the greyhound bill has been sent to the House Agriculture Committee where it's expected to die.

"We got it out of committee; unfortunately, it got channeled to another committee that could be a 'kill committee,'" Mascher said. "It went to the Ag Committee so that's what probably indicated that it was a 'kill' issue and the leadership was not in support."

The greyhound proposal also isn't being considered by a working group of eight lawmakers studying gambling issues because dog breeders say it would bring the loss of 1,500 jobs at 150 greyhound farms across the state. "That is not part of what this working group is dealing with because that one is believed to have winners and losers within the gaming community," Struyk said.

The gaming proposal with the best chance of passage in the Iowa Legislature this year would allow casinos to purchase an off-floor gaming license for poker tournaments, Mascher said.

"The only one that I think is a live round is the issue regarding the expansion of gaming in terms of allowing Texas Hold 'Em tournaments in our casinos," Mascher said. "I think that one has definitely got some legs and I think there is support for that among both caucuses."

Mascher is traditionally an opponent of expanded gambling and lives in Johnson County, where voters are opposed to having a casino. As chairwoman of the House State Government Committee, Mascher also has the power to advance or stop gambling legislation.

"I won't prevent certain things from coming to the floor; I don't want to see a full-scale gaming debate for this session," she said.

The group of lawmakers looking at the issue includes Struyk and Reps. Brian Quirk, D-New Hampton, Mike Reasoner, D-Creston, Kirsten Running-Marquardt, D-Cedar Rapids, Peter Cownie, R-West Des Moines, Jeff Kaufmann, R-Wilton, and Sen. Bill Dotzler, D-Waterloo.