Legal Battle Erupts Over Cedar Rapids Casino License

Cedar Rapids casino battle intensifies with legal challenge

Key Takeaways:

• Riverside Casino challenges Cedar Rapids' new gambling license
• Potential partnership between rival casino operators revealed
• Court hearing set for April to determine license validity

The long-standing rivalry between Cedar Rapids and Riverside casinos has taken a dramatic turn, with Riverside launching a legal challenge against Cedar Rapids' newly granted gambling license. This latest development adds another layer of complexity to the ongoing saga of casino expansion in Iowa.

The Cedar Rapids Development Group, led by Jonathan Swain, secured a license on February 6 to open a casino in Cedar Rapids, marking a significant milestone after previous failed attempts. However, this victory was short-lived as Riverside Casino & Golf Resort quickly moved to contest the decision in court.

At the heart of Riverside's argument is the claim that the 2021 public referendum in Linn County, which paved the way for the new license, was 'defective' and misleading. They argue that the ballot language asking voters if legalized gambling 'may continue' was inappropriate, given that no gambling was taking place in the county at the time.

Judge Michael Schilling, while denying Riverside's request for an immediate stay on the license, noted that there is 'a reasonable likelihood of success' in their challenge. This sets the stage for a crucial hearing on April 8, which could determine the fate of the proposed $275 million Cedar Crossing Casino & Entertainment Center.

In an unexpected twist, court documents revealed that prior to the license being granted, the rival casino operators had discussed a potential partnership. Jonathan Swain disclosed that he had approached Dan Kehl, CEO of Elite Casino Resorts (Riverside's owner), in January 2022 about joining forces on a Cedar Rapids casino application. While this collaboration never materialized, it highlights the complex relationships within Iowa's gambling industry.

The proposed Cedar Rapids casino promises to bring 792 construction jobs and 365 permanent positions, with a minimum wage of $15 per hour for non-tipped employees. However, market studies suggest that much of its revenue would come at the expense of existing Iowa casinos, particularly Riverside.

As the legal battle unfolds, Cedar Rapids officials continue to work on preliminary plans for the casino project. The outcome of the April hearing will be closely watched by industry insiders and local communities alike, as it could reshape the landscape of Iowa's gambling industry and impact economic development in the region.

This high-stakes legal showdown underscores the fierce competition and regulatory challenges faced by new casino developments in established markets. It also highlights the delicate balance between expanding gambling options and protecting existing operators' interests, a common theme in the ever-evolving casino industry.