The Racing and Gaming Commission voted unanimously today to grant a new casino license for Lyon County in Iowa’s far northwestern corner, but the five commissioners rejected applications for new casinos in Fort Dodge, Ottumwa and Tama County. The vote is no surprise; only the Lyon County project was expected to bring in mostly out-of-state gamblers. Opponents argued that the Fort Dodge, Ottumwa and Tama projects would hurt several of Iowa’s 17 current casinos. Also, the commissioners raised questions about the financing of the other projects during last week’s public hearing.

Governor Chet Culver said today that he respects “the independent body that ultimately makes the decision,” but defended his open letter to commissioners urging approval for all four new casino applications:

“I think it’s important for everyone to know where a governor stands. That’s why a public letter made perfect sense,” Culver said.  “Commission members had asked me prior to that letter. The executive director of the Racing and Gaming Commission had asked me prior to that letter. The four communities had asked me prior to that letter. I felt I had an obligation to make sure everyone understood I was for job creation in those four communities.”

Former Governor Terry Branstad is among those who have criticized Culver for trying to influence an independent body. But let’s not be naive: commissioners usually find out through private channels what the governor thinks of such proposals. I don’t see any reason to keep the public in the dark.

Whether Culver helped himself politically is a different question. Some people in the affected communities may appreciate that he did his best to move the projects forward, but the risk is that the governor looks ineffective now that the commission has rejected the Fort Dodge, Tama and Ottumwa applications.

Share any relevant thoughts in this thread.

UPDATE: Radio Iowa has reaction from the groups that sought casino licenses.

Todd Dorman wasn’t impressed by the commissioners’ decision:

I’ve said many times that I think if a county votes for gambling, has financing and a plan, they should get a license. I don’t care if existing casinos don’t want competition. It’s a mature industry. A free market, supposedly. What’s with gambling titans who don’t like risks? […]

Tama and Ottumwa had public votes, but their plans were full of missed deadlines and big funding holes. I don’t blame the commission for voting them down.

Fort Dodge had a 57-percent yes vote, money and a plan. Oh, and baggage. Two backers are being investigated for possibly giving illegal campaign contributions to Gov. Chet Culver. City workers were famously paid to attend a pro-casino rally, etc. There was plenty of foot-shooting to go around.

But Fort Dodge’s plan could have been certified baggage-free by Good Housekeeping and it still would have been voted down because it threatened to take profits from the Wild Rose Casino in Emmetsburg. Wild Rose paid millions of dollars for a state license in 2005, and that, evidently, includes a no-competition insurance policy.

A commission that was once a friendly dealer handing out licenses to the lucky is now a security guard protecting its flock from competition.

Iowa Attorney General Tom Miller announced yesterday that he is asking the State Executive Council to appoint a special prosecutor to look into allegations that three backers of a new casino in Fort Dodge made illegal contributions to Governor Chet Culver’s re-election campaign. Miller is recommending Lawrence Scalise, who is both a former attorney general and a former chairman of the Iowa Racing and Gaming Commission.

“This was not an easy decision,” Miller said [in a prepared statement]. “My office has rarely withdrawn from a case in this manner. However, I believe the need for public confidence in the criminal justice process outweighs any other consideration.”

Miller did the right thing. A longtime aide in the Attorney General’s Office, Donn Stanley, has just taken over as campaign manager for Governor Culver. Although no one from the Culver campaign appears to be a target in the criminal investigation, there is clear potential for a conflict of interest. Republicans would have screamed about a cover-up if an investigator from Miller’s office found no wrongdoing by the governor’s campaign. Brenna Findley, the Republican candidate for attorney general, has been calling on Miller to step back from the investigation.

The three Fort Dodge residents whose donations have been questioned say their contributions to Culver’s campaign came from personal funds, and a spokeswoman for the company that would manage a new casino in Fort Dodge has denied that the company instructed its local consultants to give to Culver’s campaign.

On Tuesday the Racing and Gaming Commission held a lengthy hearing about four applications for new Iowa casinos. Culver has publicly supported new casinos for a long time and sent commissioners a letter in March urging them to approve all four applications. A decision is expected on May 13. My hunch is that only the casino proposed for Lyon County in far northwest Iowa will be approved, because it is unlikely to draw business away from any of Iowa’s existing casinos. The nearest population center is Sioux Falls, South Dakota.