tag:blogger.com,1999:blog-30130444.post115462898118918224..comments2024-02-16T09:00:32.845-06:00Comments on FromDC2Iowa: Update on "Iowa's Casinos Breaking Law?"Unknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-30130444.post-1154723978583520222006-08-04T15:39:00.000-05:002006-08-04T15:39:00.000-05:00My thanks to RexusNexus for this impressive analys...My thanks to RexusNexus for this impressive analysis -- and apologies for not doing a closer job of reading in my superficial overview.<BR/><BR/>In my now (August 4) revised blog entry I (a) acknowledge the contribution, and (b) set off with "# # #" the changes I incorporated into my text.<BR/><BR/>I have already imposed far too much on RexusNexus, not to mention our readers, to ask for more on this topic -- but I am, of course, open to it.<BR/><BR/>I continue to think there are major questions here for journlists, legislators and possibly the Iowa Attorney General.<BR/><BR/>-- NickNickhttps://www.blogger.com/profile/08467682953748756539noreply@blogger.comtag:blogger.com,1999:blog-30130444.post-1154636290334394042006-08-03T15:18:00.000-05:002006-08-03T15:18:00.000-05:00I am compelled to respond. Although Nick's analys...I am compelled to respond. Although Nick's analysis is generally accurrate, as far as it goes, it misses a key line of analysis. I respond only briefly (relatively speaking), because a blog comment doesn't seem the proper place for extensive legal analysis.<BR/><BR/>As a set up, there can be no casinos or horse/dog tracks absent an organization that is licensed to carry on those activities. Nick says as much. Section 99D.9 of the Iowa Code, which governs the operation of the greyhound racing, provides that “[a] license shall not be granted to an organization if there is substantial evidence that the applicant for a license” is neither “the true owner of the enterprise” nor “the sole owner” of the enterprise. I.C.A. §§ 99D.9(3)(c) and (d). Section 99F.7, which governs the operation of casinos, provides the same. I.C.A. §§ 99F.7(7)(c) and (d). Without going any further the problem begins to crystalize: Iowa law requires that the license holders are the same organizations that run the casinos (or however else you want to define "true or sole owner of the enterprise"). As I said in my earlier post, I'd wager that, almost across the board, this is not the case, that the out-of-state, corporate gambling interests have virtually every reliable indicia of ownership over the casinos.<BR/><BR/>Why is this a problem? Why doesn't the Iowa Racing and Gaming Commission just give licenses to Harrahs, et al.? Because, contrary to Nick's post, that would be illegal. Section 99D(2)(1) defines “licensee” as meaning “a nonprofit corporation licensed under section 99D.9.” Section 99D.7, which outlines the Commission’s powers, commands that the Commission is to select applicants based upon the extent to which they serve “the interests of the citizens of Iowa,” and that the Commission is to cooperate with the “gamblers assistance program administered by the department of human services.” Section 99D.8 limits qualified applicants to those who are “nonprofit corporations[s] organized under the laws of [Iowa] . . . to promote those purposes enumerated in section” 99B.7(3)(b). Section 99B.7(3)(b) provides that a licensee must certify that “the receipt of all games, less reasonable expenses, charges, fees, taxes, and deductions . . . either will be distributed as prizes to participants or will be dedicated and distributed to educational, civic, public, charitable, patriotic or religious uses in [Iowa] and that the amount dedicated and distributed will equal at least seventy-five percent of the net receipts.” Chapter 99F, which governs casino licenses, has identical provisions. See §§ 99F.5-99F.7. When analyzing gaming statutes quite similar to the present one, the Maine supreme court explained that “the [gaming] statutes are not meant to regulate a gaming industry, but instead to provide specified types of socially desirable nonprofit organizations with a fund-raising tool.” Munjoy Sporting & Athletic Club v. Dow, 755 A.2d 531, 539 (Me. 2000).<BR/><BR/>I don't think the analysis I've given above is controversial. The contentious issues are (1) the extent to which ownership of the "licenses" counts as ownership of the "enterprise," and (2) what the term "ownership" requires in general. Iowa law also contemplates "management agreements," making another question the extent to which a licensee can transfer power via a "management agreement" without divesting itself of "true ownership."<BR/><BR/>In the end, I think it comes down to that phrase "true owner of the enterprise." Are the current licensees the true owners of Iowa's casinos? I think not. Why don't we just license the out-of-state corporations then? Because we want to keep the $$$ in state. To bad the actual arrangement represents a river of dollars flowing straight out of Iowa.Anonymousnoreply@blogger.com