Did you ever notice how some things that make no sense are accepted as completely normal in the Iowa legislature? Case in point: ongoing negotiations over the future of greyhound racing in Iowa, which may produce an enormous payoff for private businesses that would otherwise fail.
Radio Iowa’s O.Kay Henderson reported yesterday,
The final race at the “Bluffs Run” at the Horseshoe Casino in Council Bluffs would be on December 31, 2015 and Caesar’s, which owns the casino, would pay $65 million over seven years, money the Iowa Racing and Gaming Commission would distribute to greyhound owners and trainers who quit the business. Danielson said “rescue” groups that find new homes for the greyhounds retired from racing would be eligible for some of that money, too.
“So the net take away from the bill is that we would reduce in half the current footprint of greyhound racing in Iowa,” Danielson said. “We will have solved all the economic and community concerns which I think we needed to do in order to have a product that senators and (representatives) could vote for and know that it would work going forward, and we will have done it without a dime of taxpayers’ money involved.”
The dog racing currently managed and bankrolled by the Mystique Casino in Dubuque would end October 31, 2014, but the Iowa Greyhound Association would then be able to step in and manage racing there next year. The Dubuque casino would pay far less, about a million dollars a year, into the “cessation fund” for greyhound owners who leave the industry. If the bill as currently written become law, the Iowa Greyhound Association would also be given authority to simulcast their Dubuque races at any other casino in Iowa. Under current law, simulcasting is only permitted at the three state gaming facilities which have live racing.
No one has yet explained to me why greyhound breeders and other supporting businesses deserve a huge bailout just because there’s insufficient demand for their product. If I make widgets no one wants to buy, is the Iowa legislature going to force some big company to market my widgets, or force that company to compensate me for not selling them?
Hardly anyone goes to see greyhound races anymore. Nearly 40 states don’t even allow the practice. According to an Iowa Public Radio program on the topic in February, revenue from dog racing in Iowa has dropped from about $186 million annually in the mid-1980s to about $6 million in 2012. On that same program, Molly Grover of the Dubuque Chamber of Commerce said dog racing at the Mystique Casino alone receives more than $4 million in annual subsidies–money that could be put to much better use in the community.
Jim Quilty, an attorney for the Iowa Greyhound Association, claims that simulcast revenues from dog racing are growing and that the business supports 1,200 jobs in Iowa. Others have estimated that ending dog racing would cost about 543 jobs in the state. I sympathize with any small business owner on the edge, but the writing has been on the wall for a long time. If masses of people wanted to watch or bet on dog racing, the industry would succeed in its own right. Every month, thousands of jobs are created and lost in Iowa. It’s one thing for government policy to encourage businesses that will improve our future economic health. It’s another for government to insist on a bailout for a dying sector.
If we accept Quilty’s (probably inflated) figures for jobs supported by greyhound racing, $65 million over seven years works out to more than $54,000 for every job. The industry will receive that compensation even though not all greyhound-related jobs will disappear, because racing will continue in Dubuque.
I feel like we’re through the looking glass.
State Senator Jeff Danielson chairs the Iowa Senate State Government Committee, which has jurisdiction over gambling issues. He has argued that in his experience, gaming bills only succeed in the Iowa legislature if they’re “win-win.” “Win-lose” proposals don’t advance. Maybe so; other lawmakers from both parties seem focused on a deal that is mutually acceptable to casinos and the greyhound industry.
From where I’m sitting, the “grand bargain” that forced casinos to support dog and horse racing in exchange for bringing in slot machines served its purpose. The greyhound industry has had plenty of time to adapt to changing consumer preferences. I don’t understand why the state legislature should insist on a big financial windfall for them, even if the money does come from Caesar’s rather than the state budget.
I will say one thing for dog-racing advocates: they have gotten their money’s worth out of their lobbyists. Casinos have historically wielded tremendous influence with Iowa lawmakers. In 2008, the Iowa House and Senate granted casinos an exemption from the public smoking ban, because legislators cared more about gambling interests than about the health hazards secondhand smoke poses for casino employees. Yet somehow, greyhound breeders and their allies defeated casino-backed proposals to end dog racing for years and are now poised to win a huge cash settlement. Go figure.
UPDATE: I should have added that according to the Iowa legislature’s website, the Iowa Greyhound Association has employed the following lobbyists during the 2014 session: Jerry Crawford, Nick Mauro, Jim Quilty, Don Avenson, Tom Cope, and Brice Oakley. Crawford is a major Iowa Democratic donor, and Avenson is a former Iowa House speaker who was the Democratic nominee for governor in 1990.
SECOND UPDATE: Radio Iowa reported on the April 24 Iowa Senate State Government subcommittee hearing on this bill. Click through to listen to the audio. The subcommittee chair Danielson and the greyhound industry lobbyist Avenson both described the approach as providing a “soft landing” for people who want to leave the industry.
Avenson estimates there are 300 farms in Iowa where greyhounds are raised with some 50 owners involved in the 29 kennels that manage the dogs which race at the two Iowa tracks today.
James Carney, a lobbyist for Caesar’s which owns the Horseshoe Casino in Council Bluffs where the “Bluffs Run” is located, offered this statement at the end of this morning’s meeting: “To our knowledge there have been 29 dog tracks closed in this country and this is unprecedented what is taking place, the amount of the payments and how this is being handled.” […]
The bill as currently crafted would have the Iowa Racing and Gaming Commission manage the payouts to those who are retiring from the greyhound industry after at least five years of racing in Iowa. The payouts are to be based on several factors, including the number of greyhounds that have raced. The legislation also would allow Iowa agencies that find new homes for greyhounds retired from the racing circuit to receive some of the money. There are only three such agencies operating in Iowa today.
I never thought I would agree with the Caesar’s corporation on anything, but it amazes me that Iowa lawmakers are eager to help the greyhound industry squeeze that much money of the casino owner. I bet it would be a different story if the Council Bluffs casino weren’t owned by an out of state company.
THIRD UPDATE: The full Iowa Senate approved Senate File 2362 by 46 votes to 2 on April 25. The two no votes were Republican Randy Feenstra and Democrat Rich Taylor.
The floor debate on the dog-racing bill was briefly sidetracked when Democrat Wally Horn offered an amendment that would have authorized a new, smoke-free casino in Cedar Rapids. (The Iowa Racing and Gaming Commission rejected an application for a casino in Cedar Rapids earlier this month.) Horn’s amendment did not receive a vote, as it was ruled “not germane” to the bill.