Iowa Casinos Seek Tax Relief Amid Nebraska Competition


In a move aimed at bolstering the competitiveness of Iowa’s gaming industry, lawmakers in Des Moines are considering a new bill that could lead to a reduction in the effective gaming tax for casinos in the state.

With Iowa currently hosting 15 land-based commercial casinos, three riverboats, and one racino, the gaming landscape is robust, offering a variety of slot machines, table games, and sports betting options.

Under the existing tax structure, gross revenue from slots and table games is subject to a graduated tax, with the highest rate set at 22% for casinos generating at least $3 million in gross gaming revenue annually.

Representative Bloomingdale, a proponent of the proposed legislation, argues that while taxes are being lowered for individuals and corporations, casinos have been left out, prompting the introduction of House Study Bill 719.

This measure, if approved by the Legislature and signed into law by Governor Kim Reynolds, would gradually decrease the commercial gaming tax on slot and table income over a three-year period.

Already gaining traction, the study bill has passed through a House Ways and Means subcommittee, positioning it for further review and consideration by the full committee.

The impetus for this potential tax relief stems partly from the emergence of competition from neighboring Nebraska. Despite consistent growth in Iowa’s gaming industry since 2014, the advent of temporary casinos in Nebraska has impacted Iowa’s legacy gaming sector, leading to a 1.2% decline in revenue in 2023, excluding sports betting earnings.

Notably, casinos in Council Bluffs have felt the brunt of this competition, as Nebraskans now have local gaming alternatives without the need to cross state lines.

Mark Joyce, a lobbyist representing Diamond Jo casinos in Northwood and Dubuque, emphasized that tax breaks could facilitate much-needed renovations and enhancements for Iowa casinos to remain competitive against the forthcoming permanent casinos in Nebraska.

Outlined in Bloomingdale’s proposal are specific tax adjustments, with the casino slot and table tax slated to decrease to 21% effective July 1, 2024, followed by further reductions to 20% and 19% in subsequent years, ultimately stabilizing at the 19% rate thereafter.

This tax relief would apply universally to both land-based and riverboat casinos, albeit with a slightly higher tax rate proposed for the racino facility.

While Iowa’s casinos maintain a robust lobbying presence in Des Moines, the impending lift of the moratorium on July 1 underscores the urgency for legislative action to safeguard the state’s gaming industry’s vitality amidst evolving regional dynamics.

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