Iowa To Consider Cutting Casino Tax Rate To Boost Competition

Article by : Erik Gibbs Feb 27, 2024

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A proposal currently being discussed in the Iowa House aims to reduce the state tax rate for licensed casinos in Iowa, bringing it in line with or close to the rates in neighboring Nebraska and Missouri.

In contrast, Illinois casinos follow a varied tax structure, dependent on market size and the types of games offered.

Mark Joyce, a lobbyist representing the company overseeing the Diamond Jo casinos in Northwood and Dubuque, expressed support for the potential tax reduction.

According to Joyce, this adjustment would be beneficial for Iowa’s well-established casino industry. He noted that newer casinos in neighboring states, particularly in Nebraska, are subject to a lower tax rate of 20% as they begin operations.

Lowering taxes in Iowa would enable existing casinos to reinvest in their properties, fostering increased competitiveness for customer patronage.

Doug Struyk, a lobbyist representing the Catfish Bend Casino in Burlington, addressed concerns about the challenges faced by the casino due to increased competition from new establishments in Illinois.

Additionally, Struyk is a representative for Caesars Entertainment, overseeing the Horseshoe and Harrah’s casinos in Council Bluffs. These Council Bluffs casinos are soon expected to encounter competition from a newly established casino in Omaha.

Expressing gratitude for the opportunity to discuss these issues, Struyk highlighted the significant pressures the industry is currently navigating. He emphasized these challenges during a House subcommittee hearing.

The gaming revenue from the Council Bluffs casinos began to decline with the opening of the WarHorse Casino in Lincoln in September 2022 and Harrah’s opening in Columbus, Nebraska, in June of the following year. Struyk pointed out that this has impacted the influx of gamblers from Nebraska into Iowa.

To address this, Struyk stressed the necessity of additional investments in Iowa’s casino facilities. This, he believes, will ensure that these establishments remain attractive, drawing visitors to utilize Iowa’s facilities over those in Nebraska. The aim is to position Iowa’s casinos as bright, new attractions, maintaining their appeal amid increased competition.

A new WarHorse Casino is anticipated to open in Omaha by August of the current year. Representative Jane Bloomingdale, hailing from Northwood, sponsors a bill aiming to gradually reduce Iowa’s casino taxes over three years. Notably, the state-licensed Diamond Jo casino is in proximity to Northwood.

Bloomingdale contends that while taxes are decreasing for individuals and corporations, the same courtesy is not extended to casinos, which she deems unfair. She argues for a comprehensive examination of tax reductions across the board in Iowa. Her bill has successfully navigated through a House subcommittee.

However, a member of the panel expressed reservations, expressing concern that reducing casino taxes might diminish the funds allocated to the Rebuild Iowa Infrastructure Fund. This fund is instrumental in financing diverse projects, including lake dredging and the construction or renovation of state-owned buildings.