Skip to main content

IRGC Meeting - Altoona

Meeting Time: Thursday, March 4, 2021
Meeting Location

Prairie Meadows Racetrack and Casino
1 Prairie Meadows Drive
Altoona , IA 50009

Meeting Agenda Document:
Meeting Agenda
1.APPROVE AGENDA 2.APPROVE MINUTES – From January 21, 2021 Commission Meeting 3.ANNOUNCEMENTS A. April 15, 2021 – MidAmerican Center (Harrah’s), Council Bluffs (Submissions due by April 1, 2021) B. May – No Meeting C. June 3, 2021 – Catfish Bend Casino, Burlington 4.DRAFTKINGS, INC. – Request for Approval of Pools Wagering as an Approved Sports Wagering Offering 5.CATFISH BEND CASINO II, LLC – Request for Approval of Financing per Iowa Administrative Code Section 491-5.4(8)a(2) 6.SCE PARTNERS, LLC -Request for Approval of Financing per Iowa Administrative Code Section 491-5.4(8)a(2) 7.IOC BLACK HAWK COUNTY, INC. – Request for Approval of Services Agreement by and between Caesars Entertainment, Inc., Caesars Enterprise Services, LLC, Caesars Interactive Entertainment, LLC, and Caesars License Company, LLC 8.ISLE OF CAPRI BETTENDORF, L.C. -Request for Approval of Services Agreement by and between Caesars Entertainment, Inc., Caesars Enterprise Services, LLC, Caesars Interactive Entertainment, LLC, and Caesars License Company, LLC 9.HARVEYS IOWA MANAGEMENT COMPANY LLC -Request for Approval of Services Agreement by and between Caesars Entertainment, Inc., Caesars Enterprise Services, LLC, Caesars Interactive Entertainment, LLC, and Caesars License Company, LLC 10.HARVEYS BR MANAGEMENT COMPANY, INC. -Request for Approval of Services Agreement by and between Caesars Entertainment, Inc., Caesars Enterprise Services, LLC, Caesars Interactive Entertainment, LLC, and Caesars License Company, LLC 11.NATIONAL PROBLEM GAMBLING AWARENESS MONTH – Eric Preuss, Program Manager, Iowa Gambling Treatment and Prevention Program 12.IOWA GAMING ASSOCIATION – Annual Report of Qualified Community County Foundation Projects 13.EXCURSION GAMBLING BOAT AND GAMBLING STRUCTURE LICENSE RENEWALS (OSV – OUT OF STATE VENDOR; RP = RELATED PARTY A. Iowa West Racing Association/Ameristar Casino Council Bluffs, LLC B. Iowa West Racing Association/Harveys Iowa Management Company LLC C. Washington County Riverboat Foundation, Inc./Riverside Casino & Golf Resort, LLC D. Worth County Development Authority/Diamond Jo Worth, LLC d/b/a Diamond Jo Worth Contracts: 1.A H Hermel Co. – Cigarettes for Casino; Cigarettes and Grocery Items for Convenience Store 2.AJR Equities – Event Merchandise Giveaways/Marketing Promotions 3.Fairway Outdoor Advertising – Billboard Advertising in Minnesota (OSV) 4.The Dimensional Group – Direct Mail Printing Services 5.United Beverage, LLC – Purchase of Alcoholic Beverages for Casino and Convenience Store 6.Wess, Inc. – Fuel Delivery for Convenience Store 7.Worth County Hospitality – Comped Hotel Rooms for Players; Hotel Rooms for Company Personnel Visiting Property 8.NRT Technologies, Inc. – Guaranteed Check Cashing Services (OSV) 9.Technical Security Integration, Inc. – Surveillance System Upgrade (OSV) E. Black Hawk County Gaming Association/IOC Black Hawk County, Inc. Contracts 1.Bangarang Ent., LLC d/b/a Gander Group – Marketing Promotional Items (OSV) 2.Covenant Medical Center (Mercy One) – Team Member Health Clinic 3.Fahr Beverage – Budweiser Dealer and Other Beverage Products 4.Hy-Vee – Liquor, Flowers, Food, etc. 5.JCM Global – Bill Validating Technology in Slot Machines (OSV) 6.Myers-Cox Company – Cigarette Vendor 7.Reinhart Food Service – Food, Beverage and Food Service Equipment 8.Sysco Food Services of Iowa, Inc. – Primary Food Vendor 9.Wells Fargo – Corporate Credit Card Service F. Missouri River Historical Development, Inc./SCE Partners, LLC d/b/a Hard Rock Hotel & Casino Sioux City G. Regional Development Authority/Rhythm City Casino, LLC H. Scott County Regional Authority/Isle of Capri Bettendorf, L.C. Contracts: 1.Myers-Cox Company – Tobacco Vendor 2.JKR LLC d/b/a Another Round Liquors – Liquor Vendor 3.Cintas Corporation – Linen Vendor I. Dubuque Racing Association, LTD/Diamond Jo, LLC d/b/a Diamond Jo Casino J. Dubuque Racing Association, LTD Contracts: 1.Aimbridge Hospitality, LLC – Hotel Management Company (OSV) 2.Community Foundation of Dubuque – Donor Advised Endowment Fund 3.Midwest One Bank (f/k/a American Trust & Savings Bank) – Extend Date of Existing Loan Agreement K. Lyon County Riverboat Foundation, Inc./Grand Falls Casino Resort, LLC Contracts: 1.Baxter Construction Company, LLC – Sports Wagering and Hotel Addition – Construction Manager (RP) 2.Cosand Construction Company, LLC – Hotel Addition: Finish Carpentry & CO’s (OSV) 3.Forward Sioux Falls – Economic Investment Agreement (OSV) 4.Heartland Glass Company, LLC – Hotel Addition: Framed Glass & Glazing (OSV) 5.Hoogendoorn Construction, Inc. – Hotel Addition: Demo, Grading, Concrete & RV Park (OSV) 6.Sands Drywall, Inc. – Renovation Project: Drywall, Framing & Hotel Finish CO’s (OSV) L. Clarke County Development Corporation/HGI-Lakeside, LLC M. Southeast Iowa Regional Riverboat Commission/Catfish Bend Casinos II, LLC N. Clinton County Development Association/Wild Rose Clinton, L.L.C Contract: Mediacom Business Solutions – High Speed Internet Service O. Grow Greene County Gaming Corporation/Wild Rose Jefferson, L.L.C. P. Palo Alto County Gaming Development Corporation/Wild Rose Emmetsburg, L.L.C. Q. Upper Mississippi Gaming Corporation/Casino Queen Marquette, Inc. 14.IOWA GREYHOUND ASSOCIATION D/B/A IOWA GREYHOUND PARK A. Request for Approval of the 45-Day Plan for the 2021 Meet B. Contracts: 1.United Healthcare – Health Insurance for Full-time Employees 2.City of Dubuque Police Officers – Security 3.Sportview Television Corp. – TV Control Center, Monitor System, Camera and Technical Support for Live and Simulcast Racing (OSV) 15.PRAIRIE MEADOWS RACETRACK AND CASINO, INC. – Request for Approval of Contracts: 1.Daktronics, Inc. – Tote Board Replacement (OSV) 2.Fortune Wisconsin – Meat and Seafood (OSV) 3.Midwest Ambulance Service of Iowa – Ambulance and Emergency Services 4.Waste Management – Waste Removal Services 5.Willis Auto Campus – Vehicles for Giveaway Promotions 16.PUBLIC COMMENT 17.ADMINISTRATIVE BUSINESS A. Review of Year-to-Date Economic Impact Reports B. Notice of Horse Racing Promotion Fund C. Notice of Purse Amounts pursuant to Iowa Code § 99F.6(4)a(3) 18.HEARINGS A. IOC Black Hawk County, Inc. – For a violation of Iowa Code § 99F.9(5) (Minor) B. Prairie Meadows Racetrack and Casino, Inc. -For a violation of Iowa Code § 99F.9(5) (Minor) C. Robert Roe – Appeal of Administrative Law Judge’s Proposed Ruling *Executive Session – The Commission may go into Executive Session pursuant to Iowa Code Section 21.5(1)f for the purpose of discussing the decision to be rendered in a contested case conducted according to the provisions of chapter 17A. D. Steven Asmussen – Appeal of Administrative Law Judge’s Proposed Ruling *Executive Session – The Commission may go into Executive Session pursuant to Iowa Code Section 21.5(1)f for the purpose of discussing the decision to be rendered in a contested case conducted according to the provisions of chapter 17A. 19.ADJOURN

Meeting Minutes Document:
Meeting Minutes

The Iowa Racing and Gaming Commission (IRGC) met on Thursday, March 4, 2021 at Prairie Meadows Racetrack & Casino in Altoona, Iowa.  Commission members present were Kris Kramer, Chair; Pennie Gonseth Cheers, Vice Chair; and members Lance Horbach and Daryl Olsen.  Commissioner Julie Andres was absent.

APPROVE AGENDA: Chair Kramer called the meeting to order at 8:30 AM, and advised agenda items 13D(8) and the contract listed for 13N were being pulled from the agenda.  She requested a motion to approve the agenda.  Commissioner Gonseth Cheers moved to approve the agenda as amended. Commissioner Horbach seconded the motion, which carried unanimously.

APPROVE MINUTES: Chair Kramer requested a motion regarding the minutes.  Commissioner Olsen moved to approve the minutes as submitted.  Commissioner Horbach seconded the motion, which carried unanimously.

ANNOUNCEMENTS: Brian Ohorilko, Administrator, advised the next meeting would be on April 15th at the MidAmerican Center in Council Bluffs and is hosted by Harrah’s.  Submissions for that meeting are due in the Des Moines office by April 1st.  He noted there is no meeting in May.  The Commission will meet on June 3rd at Catfish Bend Casino in Burlington.

DRAFTKINGS, INC.: John Cacciatore, representing DraftKings, requested the approval of pools wagering (pools) as an approved sports wagering offering.  Pools wagering differs from wagers that are made by a player against an advanced deposit sports wagering operator where either the operator or player are the eventual winner of the wager.  Pools wagering involves combining player wagers into a pool, and the number of player wagers determines the size of the eventual payout.  Familiar forms of pools wagering include football “pick ‘em” contests and NCAA bracket pools. As in other forms of wagering, players wager on the outcomes of one or more sporting events or propositions. With pools, the sums that players wager are pooled and distributed to the player or players who win, after deducting a fee for the advanced deposit sports wagering operator. 

Mr. Cacciatore noted DraftKings currently offers its Pools products in Colorado, New Hampshire, New Jersey, Virginia and West Virginia, and believes it would be a popular offering in Iowa should it be deemed a permitted wager type.  For tax purposes, pools are conducted in a manner where a fixed rake percentage is taken from each entry fee and the rest is added to the prize pool.  DraftKings would then pay any tax due based upon the realized rake.

Mr. Cacciatore stated pools are not expressly prohibited in the statute despite other wagering restrictions being identified.  While Chapter 99F does not explicitly authorize any specific type of sports wagers, the Commission is responsible for identifying wager types that are permissible for advanced deposit sports wagering operators to offer.

Hearing no further comments or questions, Chair Kramer requested a motion. Commissioner Horbach moved to approve pools wagering as an authorized sports wager offering subject to individual wager submissions consistent with the requirements contained in 491-13.3(2).  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

CATFISH BEND CASINOS II, LLC: Gary Hoyer, Chief Executive Officer, presented a request for approval to amend the loan agreement, which will change the way the financing covenants are determined by removing the period of time the facility was closed and establishing a different formula for how the ratios are calculated.  The change is in response to the shutdown due to the Governor’s Proclamation.  The amendment also provides for an alternative interest rate benchmark in the event the LIBOR market crashes. 

Hearing no further comments or questions, Chair Kramer requested a motion.  Commissioner Olsen moved to approve the request from Catfish Bend Casinos II, LLC to amend their financing.  Commissioner Horbach seconded the motion, which carried unanimously.

SCE PARTNERS, LLC: Dustin Manternach, Chief Operating Officer, representing Peninsula Pacific Entertainment, LLC/SCE Partners, LLC, requested approval of their tack-on financing. The tack-on financing will provide incremental liquidity to protect the company in the event of another shutdown; provide cash to fund future investment in company properties; solidify the company’s debt currency in the capital markets to ensure access to capital if needed in the future; and allow the company to obtain funds at 7% cost (considering the issue premium) which is more favorable than the company’s initial borrowing rate. 

Hearing no further comments or questions, Chair Kramer requested a motion.  Commissioner Olsen moved to approve the tack-on financing as presented.  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

IOC BLACK HAWK COUNTY, INC.; ISLE OF CAPRI BETTENDORF, L.C.; HARVEYS IOWA MANAGEMENT COMPANY LLC AND HARVEYS BR MANAGEMENT COMPANY, INC.: Doug Gross, outside legal counsel for Caesars Entertainment, Inc., requested permission to address Agenda Items 7-10 as the Shared Services Agreement for each property is very similar but cover four different properties.  He advised there are Shared Services Agreements in place where corporate provides combined services to achieve an economy of scale to multiple properties.  Caesars owns these four properties, and is substituting this new agreement that provides for fees specifically related to the use of the Caesars brand and technology.  Mr. Gross stated these are for one year, and renew automatically.  The agreement also provides for a Shared Services fee, but it has not been incorporated at this time.  If that fee is added, Caesars will seek Commission approval.  Mr. Gross stated staff has been provided with an example of the costs for each individual property based on what they were in 2019.

Hearing no further comments or questions, Chair Kramer requested a motion for Agenda Items 7 through 10.  Commissioner Olsen moved to approve the Service Agreements between Caesars Entertainment, Inc., Caesars Enterprise Services, LLC, Caesars Interactive Entertainment, LLC, and Caesars License Company, LLC with IOC Black Hawk County, Inc., Isle of Capri Bettendorf, L.C., Harveys Iowa Management Company LLC and Harveys BR Management Company, Inc. Commissioner Horbach seconded the motion, which carried unanimously.

Commissioner Horbach requested staff monitor the fees being paid to the corporate owners to insure they are fairly stable.  He noted some properties are struggling to make cap ex improvements.

NATIONAL PROBLEM GAMBLING AWARENESS MONTH: Eric Preuss, Program Manager for the Iowa Problem Gambling Services Program, noted March is designated as Problem Gambling Awareness Month each year. This designation is used to increase public awareness of problem gambling and the availability of prevention, treatment and recovery services, and to encourage healthcare providers to screen clients for problem gambling.  He noted the national NCAA basketball tournament sees over $8 billion wagered on the games.  Mr. Preuss stated that 20 states plus the District of Columbia expanded their gambling offerings in 2018; however, services to mitigate the inevitable increase in the harm associated with gambling have not kept pace.

Mr. Preuss stated there are many opportunities to gamble in Iowa: 24 casinos, 2,400 lottery outlets, 2,700 social and charitable licenses are distributed each year and 5,600 amusement games, plus multiple sports wagering and fantasy sports applications and opportunities.  As a serious public health issue, problem gambling requires a comprehensive solution involving not only federal programs, but also efforts on the part of states, counties, cities, communities, families, civic groups, the gambling industry, the non-profit sector, various professions, finance, and other organizations.

He stated help is a phone call, text or chat away at Your Life Iowa and 1-800-Bets Off 24/7 and 365 days a year. A 2018 survey of adult Iowans conducted by the Social and Behavioral Research Department at the University of Northern Iowa found approximately 1.7 million adults gamble each year, 1 million adults gamble every 30 days, just over 315,000 adults can be classified as at-risk for problem gambling, and 19,000 adults meet the full criteria of a gambling disorder in any given year.  Mr. Preuss stated that prevention efforts in Iowa and across the country show prevention is effective and recovery is possible.  He stated the Iowa Department of Public Health contracts with 20 local agencies to provide problem gambling prevention treatment and recovery support services. 

Mr. Preuss stated the Your Life Iowa website is the resource hub for prevention and treatment information, resources and referral for problems related to alcohol, drugs, gambling and thoughts of suicide.  For the State Fiscal Year 2020, Your Life Iowa handled almost 14,000 contacts with 2,000 being specifically related to problem gambling; the website had approximately 209,000 visits with 60,000 going to the gambling page.  The new campaign for reaching those experiencing issues with problem gambling is “Be #1 at Getting Help” with the goal of reducing stigma and promoting empathy; increase online promotions and greater awareness during sporting events; fund treatment/access to grants/clarify financial costs; better balance statewide between gambling promotion and promotion of support for those seeking services; increase awareness of the anonymous options to seek help; and improve support messaging.

Commissioner Horbach stated the Commission would like to know sooner rather than later if the Problem Gambling Program sees a trend of something going in the wrong direction as it is easier to reverse earlier than later.  He asked if the communication link between Commission staff and Problem Gambling staff is strong so the Commission would be made aware of an adverse trend.  Mr. Preuss answered in the affirmative.  He noted there are discussions about conducting another behavior survey to determine the effects of sports wagering. 

IOWA GAMING ASSOCIATION: Wes Ehrecke, President, presented the annual report of the Qualified Community County Foundation, which is prepared with the Iowa Council of Foundations.  The report is a summary of projects funded in non-casino counties, which receive eight-tenths of one percent from gaming revenue.  This year each non-casino county received approximately $108,000 for their county foundation. The county foundations funded 1,923 grants totaling approximately $9.6 million.  Each county foundation has their own Board of Directors, and places 25% of the funds into a permanent endowment that is used to fund the grants.

Mr. Ehrecke stated that virtually every citizen of Iowa benefits in some manner from gaming.

EXCURSION GAMBLING BOAT AND GAMBLING STRUCTURE LICENSE RENEWALS (OSV – OUT OF STATE VENDOR; RP = RELATED PARTY):
Iowa West Racing Association/Ameristar Casino Council Bluffs, LLC (IWRA/Ameristar): Paul Czak, General Manager, introduced Brenda Mainwaring, Executive Director of Iowa West Racing Association.  Ms. Mainwaring referenced the report from Mr. Ehrecke, and noted the projects funded by the community foundations and the qualified sponsoring organizations would not be possible without the support of the casino partners.  She noted the last 18 months have been challenging, and have been exacerbated by the DOT work at the Council Bluffs interchange.  Ms. Mainwaring noted Ameristar has continued their direct contribution to IWRA’s efforts.  For the 20th year, IWRA contributed turkeys so that 800 families could have Thanksgiving dinner. In January, Ameristar celebrated its 25th anniversary and recognized several employees who have been there since day one, which says a lot about the facility and is indicative of IWRA’s experience and partnership with Ameristar as well.  Ms. Mainwaring stated they have an impressive sports wagering facility.  The support from Ameristar allows IWRA to support the community with broadband access, scholarships, and support for human service operations.  While 2020 was challenging, and 2021 will present its own challenges, IWRA will continue to work with Ameristar’s management and team as they make difficult business decisions and Ameristar will continue to work with IWRA so that both continue to thrive.  Ms. Mainwaring requested approval of Ameristar’s license renewal.

Mr. Czak noted that 2020 was extremely challenging, not only for the casino industry, and was proud how team members focused on being flexible and adapted to changing operating guidelines to focus on the safety of employees and patrons.  From March 17th through August 31st, Ameristar paid health insurance premiums, both the employer and employee portion, for all team members.  The company established a relief fund to assist team members, approximately $2 million has been distributed property-wide; and executive team members took significant pay cuts and gave up their annual performance bonuses, allowing the company to distribute over $13 million to assist front-line team members. The focus in 2021 is returning to more normal operations; the team member count has increased by almost 20% since reopening, and four of the five dining operations are open in some capacity.  The hotel is operating at near capacity, and the associated amenities are open.  They plan to remodel the sportsbook area in the fall and add Barstool sports.  Mr. Czak stated they look forward to continuing operations in 2021 and addressing any challenges that arise.

Commissioner Horbach commended the facilities that have employees who have been with them since they opened, as it speaks highly of the operation. 

Hearing no further comments or questions, Chair Kramer requested a motion. Commissioner Horbach moved to renew the license to conduct gambling games to Iowa West Racing Association, renew the license to operate Ameristar Casino Council Bluffs, LLC as an excursion boat that will not cruise, renew the license to conduct sports wagering to Ameristar Casino Council Bluffs, LLC, and approve the facility’s revised security plan included in the application.  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

Iowa West Racing Association/Harveys Iowa Management Company LLC: Thomas Roberts, General Manager, introduced Ms. Mainwaring. Ms. Mainwaring expressed support for the license renewal for Harrah’s Casino.  She noted their work has been critical for communities dealing with the consequences of Covid-19.  In partnership with other partners, the Iowa West Foundation dedicated nearly $1 million in rapid support in southwest Iowa to first responders, hospitals, homeless shelters, food pantries, schools, mental health providers, and continues to maintain that fund, which has seen a shift toward mental health, and the recovery of small foundations and museums who have expended all of their resources.  Ms. Mainwaring noted Covid has had a tremendous impact not only on the community, but on the business community as well.  She noted the casinos were closed for weeks; and reopened with limited facilities and social distancing requirements limiting the ability to fully utilize the facility.  Harrah’s has also been impacted by the DOT’s work on the interstate interchange.  She noted they are planning exciting things for the future, but are currently faced with some difficult business decisions.  She advised IWRA receives quarterly updates, which provides a window into the challenges driving those decisions.  Ms. Mainwaring stated their success is IWRA’s success as well as the community’s.  She noted the parties are working together to help each other find a secure future.  The River’s Edge project is about to commence construction, and the expansion of the interstate interchange will make the project available to all of Iowa and Council Bluffs.  Ms. Mainwaring requested approval of the license renewal for Harveys Iowa Management Company.

Mr. Roberts noted he moved to the Harrahs property at the end of July after serving as the General Manager at the Isle Waterloo property.  He stated it has been a challenge to get the property back to its previous operational levels, but feels they are on the right road.  He noted when the property reopened, admissions were down 65%.  In January, admissions were down 31%.  Gaming revenues were down 56% last July; in January, they were down 16%.  Mr. Roberts stated their business draws on food covers, 55 and over players, and hotel rooms.  He noted Caesars paid their employees while they were out on furlough, and to help insure staff was ready to come back when they could reopen.  Mr. Roberts stated they feel they have a good plan in place to get the facility back to where it needs to be from an operational standpoint.  He acknowledged there have been questions regarding capital expenditures from the Commission.  He advised they spent $735,000 with the concentration being on life, safety and emergency issues.  They received authorization to repair the chiller system for approximately $300,000.  Mr. Roberts acknowledged one of the reasons for their revenue shortfall is a lack of food offerings.  He feels the property is on track in developing a restaurant that will draw customers to the facility.

Commissioner Horbach noted Council Bluffs is the front line of the Iowa gaming experience with Nebraska recently approving gambling.  He noted it is an added burden and opportunity, and is interested in seeing their plan. 

Hearing no further comments or questions, Chair Kramer requested a motion.  Commissioner Olsen moved to renew the license to conduct gambling games to Iowa West Racing Association, renew the license to operate Harveys Iowa Management Company LLC as a gambling structure and renew the license to conduct sports wagering to Harveys Iowa Management Company LLC.  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

Washington County Riverboat Foundation, Inc./Riverside Casino & Golf Resort, LLC (WCRF/RCGR): Dan Kehl, Chief Executive Officer of Elite Casino Resorts, introduced Dave Irwin, Vice President of WCRF.  Mr. Kehl stated they are aware the license is a privilege, which is only granted after careful consideration. He noted the operators owe a duty, not only to the Racing & Gaming Commission, but to the residents of Iowa.  In 2004, the Commission challenged the industry to make big improvements to the customer experience and make Iowa casinos a destination for travelers from out-of-state.  When the plans for RCGR were drawn up in 2005, they proposed amenities never before contemplated in Iowa – a Rees Jones golf course, a high-end hotel and luxurious spa and multiple food outlets.  Today, those amenities are considered standard operating features.  In 2011, Elite Casinos went to northwest Iowa, and Grand Falls Casino in Lyon County has all of the amenities that you see at RCGR.  In 2016, Elite Casinos converted the Rhythm City Casino riverboat to a full service resort that is now the top revenue producer in the market.  The facility is doing well because it has become the premier destination for meetings and events in the Quad Cities.  In 2018, Elite reinvested $12 million into RCGR; the project revitalized the 375,000 square foot gaming floor, restaurants and hotel rooms.  New technology and new amenities played a big role in the remodel; modernizing the gaming experience for new and returning guests.  The final piece of the remodel included the $3 million renovation of the Events Center to be completed this year plus another $1 million to upgrade slot products. After adding a $12 million hotel expansion at Grand Falls in 2020, they plan to invest another $8 million in the property over the next 18 months to refresh the property to enhance the experience of their guests.  The project will complement the new hotel rooms with an outdoor dining experience complete with a giant LED screen and covered seating by the resort pool.  Grand Falls will invest another $1 million to upgrade slot product.  Mr. Kehl stated they will be investing $2 million in resort upgrades and slot product at Rhythm City in the year ahead.  In total, Elite Casinos has planned investments of $15 million in the next 18 months to supplement the $30 million spent the last two years to keep the properties in immaculate condition.  Mr. Kehl stated the Commission’s careful regulation of the industry’s operations and markets allows them to think big and plan for the long haul.  He noted the company is owned by 1,200 investors and employs 1,600. 

Mr. Irwin advised there have been 37 different board members since WCRF’s inception.  While 2020 was challenging, WCRF feels they met their goals and came through the challenging times successfully.  After the casino closed on March 16th, the Board cancelled the spring grants in order to conserve the funds available for some long-term grants.  They currently have a four-year commitment to the Washington County YMCA for $2 million, and a two-year $650,000 commitment to the City of Washington for a sports complex.  As Covid progressed and the derecho hit the Cedar Rapids and Iowa City areas, WCRF, the Kehl Family and Elite Casino awarded $500,000 for immediate relief to the Cedar Rapids Red Cross, United Way, Salvation Army, and Hawkeye Area Community Action Program (HACAP).  After the casino reopened, they had a scaled back grant cycle and awarded $244,315 in grants, including $113,000 to Cedar Rapids and Linn County groups.  In looking forward to a positive 2021, WCRF is planning on two grant cycles, and are excited for what the future holds, but will be cautious and good stewards of the funds.  Mr. Irwin stated WCRF and RCGR have an excellent relationship.

Commissioner Olsen asked if WCRF routinely awards grants for extended periods of time.  Mr. Irwin indicated it was for very large grants, but try not to get committed too far out.  He indicated they will be more cautious of those types of grants in the future. 

Commissioner Horbach complimented WCRF and the various casinos around the state that stepped up and provided funding to help with COVID-19 and the derecho, noting they were meeting or exceeding the Commission’s expectations.

Hearing no further comments or questions, Chair Kramer requested a motion.  Commissioner Gonseth Cheers moved to renew the license to conduct gambling games to Washington County Riverboat Foundation, Inc., renew the license to operate Riverside Casino & Golf Resort, LLC as a gambling structure, and renew the license to conduct sports wagering to Riverside Casino & Golf Resort, LLC.  Commissioner Olsen seconded the motion, which carried unanimously.

Worth County Development Authority/Diamond Jo Worth, LLC d/b/a Diamond Jo Worth (WCDA/DJW): Scott Smith, General Manager, stated this time of year is exciting as the properties and non-profits get to talk about what they have done to continue to grow their communities and surrounding areas.  While Worth County doesn’t have a large population, the Northwood property is one that continues to attract guests.  The property gives 5.76% of gross gaming revenue to WCDA to support non-profit entities in Worth County and the surrounding area.  Mr. Smith introduced Harlan Helgeson, President of WCDA.

Mr. Helgeson thanked Mr. Smith and the DJW team for their work at the property.  He advised WCDA continues to strongly support education in the form of scholarships at five local school districts, along with grants to other organizations.  He requested renewal of the license.

Mr. Smith presented the following contracts for Commission approval:

  • A H Hermel Co. – Cigarettes for Casino; Cigarettes and Grocery Items for Convenience Store
  • AJR Equities – Event Merchandise Giveaways/Marketing Promotions
  • Fairway Outdoor Advertising – Billboard Advertising in Minnesota (OSV)
  • The Dimensional Group – Direct Mail Printing Services
  • United Beverage, LLC – Purchase of Alcoholic Beverages for Casino and Convenience Store
  • Wess, Inc. – Fuel Delivery for Convenience Store
  • Worth County Hospitality – Comped Hotel Rooms for Players; Hotel Rooms for Company Personnel Visiting Property
  • Technical Security Integration, Inc. – Surveillance System Upgrade (OSV)
     

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Horbach moved to renew the license to conduct gambling games to Worth County Development Authority, renew the license to operate Diamond Jo Worth, LLC d/b/a Diamond Jo Worth as a gambling structure, renew the license to conduct sports wagering to Diamond Jo Worth, LLC d/b/a Diamond Jo Worth, approve the facility’s revised security plan included in the application, and the contracts as submitted.  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

Black Hawk County Gaming Association/IOC Black Hawk County, Inc. (BHCGA/IOCW): Chad Moine, General Manager, introduced Betsy Ratchford, President of BHCGA.  Ms. Ratchford advised BHCGA and IOCW have an exceptional partnership.  Last year, WCDA celebrated 13 years of awarding grants to worthy projects in the area; however, 2020 will be known as a year of adaptation to the pandemic and the tremendous challenges it presented.  Following the closure of the casino, the Board decided to pause grant awards until the impact on revenue was determined.  This provided the Board an opportunity to reflect and review their funding categories, and provided BHCGA staff and Board more time to complete an in depth analysis of their funding strategies and priorities.  In June when the casino reopened and the revenue stream restarted, the Board decided to fund the fall grant cycle.  Ms. Ratchford advised that on January 25th of this year, the Board approved and funded approximately $1.7 million to twelve projects.  They also opened their spring funding grant cycle and look forward to granting additional awards in May.  Since July of 2007, BHCGA has awarded over $50.3 million to 609 projects.  She noted 90% of the funds remain in Black Hawk County, but the Board reserves up to 10% for worthy projects in Bremer, Buchanan, Butler, Chickasaw, Grundy, and Tama counties.  She noted their $50.3 million in awards has leveraged an additional $100 million in partnering investments.  Ms. Ratchford stated the promises made to the Commission 13 years ago are being fulfilled, and requested approval of the license renewal.

Mr. Moine stated that like the other facilities, IOCW faced challenging times during 2020, but did spent $800,000 to assist employees while they were furloughed, and $120,000 on PPE to reopen and still provide free masks to guests.  He advised the property has extended their non-smoking footprint during this time and moved it closer to the entrance.  Mr. Moine stated this has increased the number of 55+ patrons visiting the facility.  While the number of patrons allowed was restricted early on, Mr. Moine stated they are starting to see the numbers come back  and  will be reopening three of their four restaurant options this coming weekend.  He advised BHCGA receives 5.75% of the gaming revenue.  Mr. Moine requested approval of the license renewal and presented the following contracts for Commission approval:

  • Bangarang Ent., LLC d/b/a Gander Group – Marketing Promotional Items (OSV)
  • Covenant Medical Center (Mercy One) – Team Member Health Clinic
  • Fahr Beverage – Budweiser Dealer and Other Beverage Products
  • Hy-Vee – Liquor, Flowers, Food, etc.
  • JCM Global – Bill Validating Technology in Slot Machines (OSV)
  • Myers-Cox Company – Cigarette Vendor
  • Reinhart Food Service – Food, Beverage and Food Service Equipment
  • Sysco Food Services of Iowa, Inc. – Primary Food Vendor
  • Wells Fargo – Corporate Credit Card Service
     

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Olsen moved to renew the license to conduct gambling games to Black Hawk County Gaming Association, renew the license to operate IOC Black Hawk County Gaming, Inc. as a gambling structure, renew the license to conduct sports wagering to IOC Black Hawk County, Inc., approve the facility’s revised security plan included in the application, and the contracts as submitted.  Commissioner Horbach seconded the motion, which carried unanimously.

Missouri River Historical Development, Inc./SCE Partners, LLC d/b/a Hard Rock Hotel & Casino Sioux City (MRHD/HRHC): Doug Fisher, General Manager, introduced Stacy Harmelink, President of MRHD.  Ms. Harmelink stated that from the time HRHC opened in August 2014 through January 2021, the total fees paid to MRHD totals just over $21 million.  She advised the close relationship between the entities allows MRHD to distribute $2.35 million per year to Woodbury County and the surrounding counties.  Once HRHC reopened, MRHD created a COVID-19 emergency relief grant cycle and distributed over $150,000 to agencies to help their communities weather the pandemic.  As gaming income has rebounded under the disciplined mitigation system, MRHD has resumed its $300,000 scholarship grants to the four local colleges; these grants help more than 100 college students from Woodbury County achieve their education goals each year.  Additionally, MRHD put two additional grant cycles back on the calendar for this fiscal year, making for a compressed but rewarding six months.  Ms. Ratchford advised MRHD has a positive outlook since revenue projections remain stable.  She stated MRHD has fulfilled its $1.25 million economic development pledge to the City of Sioux City to help complete miles of connected bike trails, and recently contributed $50,000 to the Municipal Airport.  Last summer, MRHD paid its first five-year installment of $200,000 on its $1 million pledge to Sioux City’s riverfront enhancement project.  Ms. Ratchford noted MRHD also has an ongoing commitment to the Lewis & Clark Interpretive Center and Betty Strong Encounter Center at $550,000 per year.  She noted the Board recently established a Governance Committee to ensure compliance with their By-Laws and oversee their annual Conflict of Interest disclosure statements.  Ms. Ratchford requested renewal of the gaming license.

Mr. Fisher thanked Ms. Ratchford for her comments and reiterated the common goal of MRHD and HRHC, which is to serve the community they live in.  He noted the entities meet on a regular basis to keep MRHD up-to-date, and ensure they are on the same page.  He requested approval of the license renewal.

Hearing no further comments or questions, Chair Kramer requested a motion.  Commissioner Gonseth Cheers moved to renew the license to conduct gambling games to Missouri River Historical Development, Inc., renew the license to operate SCE Partners, LLC d/b/a Hard Rock Hotel & Casino Sioux City as a gambling structure, renew the license to conduct sports wagering to SCE Partners, LLC d/b/a Hard Rock Hotel & Casino Sioux City, and approve the facility’s revised security plan included in the application.  Commissioner Horbach seconded the motion, which carried unanimously.

Regional Development Authority/Rhythm City Casino, LLC (RDA/RCC): Mo Hyder, General Manager, introduced Matt Mendenhall, President of RDA.  Mr. Hyder stated RDA and RCC have an incredible working relationship, and work closely in selecting projects and collaborate on different opportunities that benefit the community and the Quad Cities area as a whole.  Over the past year, Mr. Hyder stated the facility experienced good revenue increases, and as a result, have been able to contribute to the RDA, and the State of Iowa, Scott County and the City of Davenport.  He noted approximately 96% of expenditures were with Iowa vendors, consistent with the mandate to buy Iowa First.  Mr. Hyder stated the facility sits in a location that allows it to attract business from neighboring and surrounding states.

Mr. Mendenhall thanked Mr. Hyder and the RCC team as they go above and beyond in the community.  He stated their success in these difficult times is a testament to their leadership and community commitment.  Mr. Mendenhall advised RDA, similar to other nonprofits, partnered with other lenders in the community to align resources to make sure food, shelter and health needs would be met immediately.  He stated RDA contributed $300,000 immediately, and another $2.5 million of relief aid was provided to the community.  Upon reviewing RDA’s records, Mr. Mendenhall advised the nonprofit has granted over $10 million to support amenities and infrastructure in the downtown area.  He indicated this would continue to be a big priority for them.  Mr. Mendenhall stated RDA has played a big part in addressing housing challenges, and have granted over $3.5 million to various housing networks.  He estimated their grants have conservatively leveraged another $6 million in funds for the housing networks.  In January, RDA opened a non-endowed donor-advised fund at the Quad Cities Community Foundation.  The RDA Board recognizes the importance to both the granting role and the community leadership role RDA plays in the community.  Mr. Mendenhall stated the Community Fund was possible due to the revenue sharing formula approved for RDA, and Rhythm City has been successful in increasing revenues.   He stated RDA looks forward to the coming year, and plans to strengthen their relationship with RCC.

Mr. Hyder requested approval of the license renewal.

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Horbach moved to renew the license to conduct gambling games to Regional Development Authority, renew the license to operate Rhythm City Casino, LLC as a gambling structure, and renew the license to conduct sports wagering to Rhythm City Casino, LLC.  Commissioner Olsen seconded the motion, which carried unanimously.

Scott County Regional Authority/Isle of Capri Bettendorf, L.C. (SCRA/IOCB): Sally Rogers, Director of Finance, expressed regrets on behalf of Nancy Ballenger, General Manager, who was unable to attend, and introduced Mary Mahoney, representing SCRA.  Ms. Rogers stated IOCB continues to have a great relationship with the SCRA and appreciate everything they do to distribute funds in the greater Quad Cities region.  She noted IOCB was also impacted by the pandemic over the last year, and is hopeful the situation is improving and moving toward some form of normalcy.  The property continues to foster a great relationship with the City of Bettendorf.  She noted the Event Center is hosting a record number of weddings as Illinois is still under stricter pandemic restrictions than Iowa; and conventions for the remainder of the year look promising.  Ms. Rogers noted travel to the facility over the last several years has been hampered by the reconstruction of the bridge over the river, but are hopeful it will be completed as planned.

Ms. Mahoney advised the SCRA Board of Directors made a decision to suspend the spring 2020 grant cycle and provide a new grant opportunity to assist organizations with needs related to the Covid-19 pandemic.  These funds were disbursed without the usual reimbursement documentation requirements. The funding criteria was changed to include general operating expenses and defined two funding priorities for the spring cycle.  The first was for organizations or projects that served populations already vulnerable or were disproportionately affected by the Covid-19 pandemic, and secondly, organizations who lost revenue or saw increased demand for services as a result of the pandemic.  Due to these changes, the majority of requests the SCRA saw were for operating expenses, salaries and other day-to-day expenses that fell under the adjusted criteria.  All spring and fall 2019 grant reimbursement deadlines were automatically extended six months.  Ms. Mahoney stated SCRA continued funding five on-going multi-cycle grants in 2020 totaling $235,500 for the Scott County Family Y, the City of Bettendorf and Pleasant Valley community school districts, the Davenport Public Library and St. Ambrose University.  She noted SCRA received 144 grant requests for 2020; they funded 111, or 80% which is higher than they would normally do.  Grant requests received totaled $3,108,000 and they distributed $1,931,000.  Since 1991, SCRA has distributed $89,111,000.  Ms. Mahoney stated IOCB is responsive to the needs of SCRA, and are a great community partner. 

Ms. Rogers requested approval of the license renewal and the following contracts:

  • Myers-Cox Company – Tobacco Vendor
  • JKR LLC d/b/a Another Round Liquors – Liquor Vendor
  • Cintas Corporation – Linen Vendor

Chair Kramer noted the cap ex expenditures at all of the Caesars properties for the coming year are much lower than at the other facilities around the state.  She stated the Commission would like to see more investment in the Iowa market from the Caesars properties.

Hearing no further comments or questions, Chair Kramer requested a motion.  Commissioner Olsen moved to renew the license to conduct gambling games to Scott County Regional Authority, renew the license to operate Isle of Capri Bettendorf, L.C. as a gambling structure, renew the license to conduct sports wagering to Isle of Capri Bettendorf, L.C. and the contracts as submitted.

Commissioner Horbach seconded the motion, which carried unanimously.

Dubuque Racing Association, LTD/Diamond Jo, LLC d/b/a Diamond Jo Casino (DRA/DDJ): Wendy Runde, General Manager, stated 2020 was a year to learn with the incomparable; over two months of lights out on the casino floor is an eerie and uncomfortable position; but reopening the casino with plexi barriers, masks, social distancing measures, and a bottle of Rapicide and towel in the other were also uncomfortable.  She stated it was clearer than ever that it is an honor and privilege to hold a license to operate a casino in the State of Iowa; and to be back in business today.  She noted their core customer is a 55-year old female and older; that demographic is more skeptical and is more hesitant to return to the casino; however, over the last year in the absence of other entertainment options, DDJ has seen a new customer frequent the casino and that is a younger demographic.  She stated DDJ has a great opportunity ahead in getting the core customer back to the facility but keeping the new guest as well.  Ms. Runde introduced Jesús Avilés, President and CEO of the Dubuque Racing Association and Q Casino, and Kevin Lynch, Board Chair for DRA.

Mr. Avilés advised Q Casino and DDJ were the first two competitors in the same market, but noted they are also partners.  He stated DRA/Q Casino admires what DDJ has been able to do with very little.  He advised DRA is a nonprofit organization that happens to run a casino. DRA has contributed close to $1 million since beginning operations. 

Mr. Lynch requested approval of the license renewals for Diamond Jo, LLC d/b/a Diamond Jo Casino and the Dubuque Racing Association.  He noted that while they compete for market share on a daily basis, their partnership is real.  Mr. Lynch stated back in 1980 Dubuque was in dire straits; however, one the sparks that brought the community back to life was the advent of gaming in Dubuque.  He indicated the amount of money distributed to schools, nonprofits and volunteer groups over the last 40+ years is staggering. Mr. Lynch noted the Q Casino sits on an island about a mile upriver from the DDJ.  The island’s namesake is Aloysius Schmitt or Chaplain Schmitt.  The island is home to several war and veterans memorials; DRA took on the project of moving them to a central location on the island at a cost of $3.2 million.  There will be a memorial to Chaplain Schmitt called Skyward Memorial, which will include a spiraling walkway over the water to a 20 foot stainless steel sculpture with lights that will illuminate the night sky, representing the last moments of Chaplain Schmitt’s life.

Commissioner Gonseth Cheers expressed her appreciation for the background information on the project.  Mr. Lynch noted the Skyward sculpture was fabricated in Des Moines and had to be shipped to Dubuque on an over-sized semi.  He stated that when the trucking company learned of the story and intended use of the sculpture, they refused payment for the trucking and the drivers, Viet Nam veterans, also refused payment.

Hearing no further comments or questions, Chair Kramer requested a motion.  Commissioner Gonseth Cheers moved to renew the license to conduct gambling games to Dubuque Racing Association, Ltd., renew the license to operate Diamond Jo, LLC d/b/a Diamond Jo Casino as a gambling structure, renew the license to conduct sports wagering to Diamond Jo, LLC d/b/a Diamond Jo Casino, and approve the facility’s revised security plan included in the application.  Commissioner Olsen seconded the motion, which carried unanimously.

Dubuque Racing Association, LTD (DRA).: Brian Rakestraw, General Manager of Q Casino, introduced Steve McCarron, the new Chief Financial Officer.  Mr. McCarron replaced Bill Eichhorn who retired after 35 years with the organization.  Like all of the other casinos, Q Casino closed on March 16 and remained closed until June 1, 2020.  During the closure, the facility was able to keep all of the employees whole and paid their insurance. They brought a majority of the employees back when the facility reopened, and are almost back to full staff at this time.  Prior to the pandemic, in addition to the gaming and sports wagering, Q Casino had three restaurants, live entertainment, a live outdoors concert series, and a hotel that was operating at close to full occupancy.  Mr. Rakestraw advised the facility is still struggling with attendance, which is affecting the non-gaming operations, one restaurant has fully reopened, and Houlihan’s is open part-time.  The hours of operation will expand as hotel occupancy increases.  Houlihan’s will also be renovated this summer and add outdoor seating. Mr. Rakestraw noted the facility had received Commission approval to expand the hotel with a new tower, hotel restaurant and convention space prior to the pandemic.  The project has been put on hold until the end of the year at which time they will re-evaluate their needs to determine how to proceed.  Mr. Rakestraw stated Q Casino and the DRA Board hope to be in a position in the future to move forward with this project or one similar.  They are optimistic and are hopeful they will recover from the pandemic soon. Mr. Rakestraw requested approval of the license renewal and the following contracts:

  • Aimbridge Hospitality, LLC – Hotel Management Company (OSV)
  • Community Foundation of Dubuque – Donor Advised Endowment Fund
  • Midwest One Bank (f/k/a American Trust & Savings Bank) – Extend Date of Existing Loan Agreement

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Horbach moved to renew the license to conduct gambling games to Dubuque Racing Association, Ltd., renew the license to operate Dubuque Racing Association, Ltd. as a gambling structure, renew the license to conduct sports wagering to Dubuque Racing Association, Ltd., and the contracts as submitted. Commissioner Olsen seconded the motion, which carried unanimously.

Lyon County Riverboat Foundation, Inc./Grand Falls Casino Resort, LLC (LCRF/GFCR): Sharon Haselhoff, General Manager, introduced Jerry Keizer, President of LCRF.  She stated they were seeking approval of the license renewal and the following contracts:

  • Baxter Construction Company, LLC – Sports Wagering and Hotel Addition – Construction Manager (RP)
  • Cosand Construction Company, LLC – Hotel Addition: Finish Carpentry & CO’s (OSV)
  • Forward Sioux Falls – Economic Investment Agreement (OSV)
  • Heartland Glass Company, LLC – Hotel Addition: Framed Glass & Glazing (OSV)
  • Hoogendoorn Construction, Inc. – Hotel Addition: Demo, Grading, Concrete & RV Park (OSV)
  • Sands Drywall, Inc. – Renovation Project: Drywall, Framing & Hotel Finish CO’s (OSV)

Ms. Haselhoff stated the facility added 66 hotel rooms in 2020, and were able to open them to the public by the end of 2020.  The additional rooms are proving to be a very nice addition; they are still finishing up the outside and should be done by April.  For 2021, GFCR is planning a refresh of the gaming floor starting in Quarter 4 and going into 2022.  They are planning to spend $2 million in 2021 to refresh the gaming floor with gaming chairs and slot bases, and other $5 million in 2022 for a total of $7 million for the casino refresh.  They hope to have plans for the Commission’s review in Quarter 3.  Additionally, $1 million has been budgeted for slot machine purchases over that time period.  Ms. Haselhoff noted they have a great partner in LCRF, and that the casino had extended their agreement with them in 2020 for another ten years.  She expressed her appreciation for how Elite Casino Resorts empowers its employees to be engaged in their respective communities with the Winning Hands volunteer program. 

Mr. Keizer stated LCRF is proud to partner with GFCR; they continue to show great support to the county and neighboring counties.  Even with the facility being closed, LCRF was still able to receive over $2.8 million in revenue.  Mr. Keizer noted LCRF has some multi-year grants, but the current board has worked to pay them down, and they had sufficient funds to cover the necessary payments for 2020.  He stated LCRF still gives 50% of the revenue to non-competitive grants to the three public schools in Lyon County, the eight cities within the county, and the county itself.  Mr. Keizer stated LCRF did a mini-grant distribution on November 5, and gave out $50,000.  Two nights ago, the LCRF Board distributed $649,595 to Lyon County and the surrounding counties.  He advised they have kept the sports betting revenue separate.  In 2020, LCRF gave the three public schools $3,000 each to help with Covid-19 expenses. They put in cameras so parents and grandparents could watch sporting and musical events, purchased some PPE for weight rooms, and one purchased a water tank with mini-dispensers for the football team.  For 2021, LCRF is working with the cities and the American Legion and Auxiliary as they are struggling to find money to purchase flags.  Mr. Keizer requested approval of the license renewal for GFCR.

Commissioner Olsen expressed the Commission’s appreciation for the funds expended to keep the facility in mint condition. 

Hearing no further comments, Chair Kramer requested a motion.  Commissioner Olsen moved to renew the license to conduct gambling games to Lyon County Riverboat Foundation, Inc., renew the license to operate Grand Falls Casino Resort, LLC as a gambling structure, renew the license to conduct sports wagering to Grand Falls Casino Resort, LLC, and approve the contracts as submitted.  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

Clarke County Development Corporation/HGI-Lakeside, LLC (CCDC/Lakeside): Dave Monroe, General Manager, stated the facility has a great relationship with CCDC.  He introduced Bill Trickey, Executive Director of CCDC.

Mr. Trickey stated Lakeside has provided Clarke County the opportunity to dream big for the last 28 years.  They have been able to build walking trails and provide computers to all of the students in the schools, as well as many other projects.  He complimented Mr. Monroe and the staff at Lakeside for their hard work during 2020.  He requested approval of the license renewal.

Mr. Monroe stated that in March 2020, he was full of optimism as Lakeside had just completed their sixth quarter of growing admissions and revenues, seeing double digit growth in both areas in January and February.  He advised at the Commission meeting they would be starting to invest capital in the public space, and then everything came to a stop.  Mr. Monroe stated Lakeside saw a 40% decline in visits for most of 2020; he advised approximately 35% of players have returned.  Many employees chose not to return as they weren’t comfortable in the environment.  He stated that to the best of their knowledge, they did not have a single instance of someone contracting the virus on the property. 

Mr. Monroe stated 2021 is starting with optimism; in January a guest that did not return in 2020 came to the property.  They hope to return to operating 24/7 over the next few weeks.  He indicated they will be bringing designs to the Commission in the next couple of months for exterior and interior projects.  Mr. Monroe acknowledged the license is a privilege, and requested approval of the license renewal.

Hearing no comments or questions, Chair Kramer requested a motion. Commissioner Gonseth Cheers moved to renew the license to conduct gambling games to Clarke County Development Corporation, renew the license to operate HGI-Lakeside, LLC as a moored barge, renew the license to conduct sports wagering to HGI-Lakeside, LLC, and approve the facility’s revised security plan included in the application.  Commissioner Horbach seconded the motion, which carried unanimously.

Southeast Iowa Regional Riverboat Commission/Catfish Bend Casinos II, LLC (SIRRC/CBC):  Rob Higgins, General Manager, introduced Justin Pieper, Vice Chairman of SIRRC.  Mr. Pieper stated the entities have a very good relationship, and have quarterly meetings to stay abreast of developments at the casino.  He stated CBC continues to do wonderful things in the communities of Burlington, Keokuk and Fort Madison.  He noted Keokuk utilized some of their funding to purchase equipment for the fire and police personnel; Burlington funded career programing at the school; and Burlington and Fort Madison provided funding to their respective art centers.  Fort Madison also utilized funds to rebuild the historic gazebo in the community central park.  Mr. Pieper expressed appreciation for the support from the casino, not only in the formal agreement, but also for funds provided to non-profit organizations outside of the formal agreement.  He requested approval of the license renewal.

Mr. Higgins concurred with Mr. Pieper’s statement regarding the great relationship between the two entities.  He noted that when the pandemic hit and the casinos had to close, CBC was in the process of making a large investment into the gaming floor, which was then put on hold.  The project was completed once the casino reopened.  He advised they are also taking this opportunity to invest in and remodel the Pzazz Resort Hotel located on the entertainment side.  It will be reopened in the fall, giving the property three hotels on the property.  Mr. Higgins requested approval of the license renewal

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Horbach moved to renew the license to conduct gambling games to Southeast Iowa Regional Riverboat Commission, renew the license to operate Catfish Bend Casinos II, LLC as a gambling structure, renew the license to conduct sports wagering to Catfish Bend Casinos II, LLC, and approve the facility’s revised security plan included in the application.  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

Clinton County Development Association/Wild Rose Clinton, L.L.C. (CCDA/WRC): Steve Nauman, General Manager, noted Clinton County is approaching the 30-year anniversary of gaming in the county, and stated the relationship between the CCDA and WRC has never been stronger.  He stated the Board is made up of dedicated, hard-working individuals; their service to the community sets a positive example for everyone.  Funds distributed by CCDA have reached every corner of the county – classrooms, arts, fire trucks, and the medical center.  Mr. Nauman stated Clinton County is a better place to live, work and play because of the work of the CCDA.  He introduced Jerome Burken, CCDA Board member.

Mr. Burken stated he has been on the board for twenty plus years, and now term limits have been established.  He indicated it has been a privilege to serve on the CCDA.  They have distributed funds for scholarships, fire departments, community and school playground equipment, and made a 5-year commitment to provide funds toward a new linear accelerator for the hospital for cancer radiation treatments.  He advised they just paid the final installment.  They have recently made a commitment to help fund an assisted living facility in Clinton County.  Mr. Burken stated since CCDA did not award grants last spring, the funds were donated to help with Covid-19 expenses in the county.  Mr. Burken requested approval of the license renewal.

Mr. Nauman requested approval of the license renewal.

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Olsen moved to renew the license to conduct gambling games to Clinton County Development Association, renew the license to operate Wild Rose Clinton, L.L.C. as a gambling structure, renew the license to conduct sports wagering to Wild Rose Clinton, L.L.C., and approve the facility’s revised security plan included in the application.  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

Grow Greene County Gaming Corporation/Wild Rose Jefferson, L.L.C. (GGCGC/WRJ): Travis Dvorak, General Manager, thanked the Commission for their license.  He indicated that as a member of the community, WRJ feels their contribution and involvement in the community should extend past the 5% of gaming revenue guaranteed to GGCGC.  Since opening in 2015, WRJ has provided almost a quarter million of additional funds in donations to the local schools, hospitals, law enforcement, local food banks and many non-profit and charitable organizations in Jefferson and throughout the county.  Team members are encouraged to be active in organizations within their communities, as WRJ believes the financial and active involvement are crucial for the success of WRJ and Greene County.  Mr. Dvorak requested approval of the license renewal.

Mr. Dvorak introduced Peg Raney, representing GGCGC.  She stated they held their 2020 awards via Facebook Live on April 7th.  She advised each of the contiguous counties received $42,810 through their county community foundations, which then make their own decisions on what projects to fund, and report back to GGCGC.  Ms. Raney stated the funds have been utilized for restrooms along the bike trails; an accessible baseball field, a public library and many other worthwhile projects. She stated GGCGC has a great relationship with the counties and volunteers on the community foundation boards.  Additionally, GGCGC funds the Greene County Community Foundation, which was in existence prior to the casino coming to Jefferson; they received $150,000 in 2020 to distribute to local grant projects under $35,000.  A total of 36 grants throughout Greene County were awarded in 2020 through the Greene County Foundation for libraries, parks, schools and other organizations.  Each of the seven municipalities in Greene County continued to receive funds per capita toward projects decided on by their own city councils. She highlighted some the projects within those communities.  Ms. Raney noted GGCGC has made several long-term commitments.  She stated they paid the last $20,000 of a $100,000 commitment to the Greene County Medical Center for the expansion project; another $67,000 was awarded for the second year of a three-year pledge for the new Greene County Animal Shelter.  Plans will move forward this spring with additional funding from the City of Jefferson and some private fund raising.  The brand new Greene County Community High School opened last fall just off Highway 30 across from WRJ.  In 2018, GGCGC worked with the school bond committee and pledged $4.5 million toward the gymnasium and performing arts auditorium.  The Board of Supervisors pledged $5 million for the Iowa Central College Career Academy, which is connected to the new high school.  These pledges were key to the successful passage of the school bond.  Ms. Raney stated WRJ partnered with GGCGC to get a state-of-the-art scoreboard in the gymnasium this past fall.    She advised the Paton-Churdan School District received another annual $30,000 toward their school improvement projects.  The 2020 grants awarded last April from GGCGC are those over $35,000; they included $125,000 of a 4-year $500,000 pledge for the early learning center.  This is a non-profit organization working to update their childcare facility to a $1.8 million center near downtown Jefferson.  The funding was leverage for a Future Iowa Ready Childcare Challenge Grant, which they hope to hear about soon, and other opportunities to fund the project.  Additional funds were provided to the Scranton Fire Department, Greene County Medical Center, Greene County Development Corporation, and Give Back Awards of $5,000 were given at the Board’s discretion before Christmas.  Ms. Raney stated support for Covid became the Board’s focus after the annual funding was allocated.  They supported the following areas with grants of $35,000: Education/Families; Food and Essentials; Public Health and Greene County Small Businesses.  GGCGC also hosted a fundraising workshop for interested organizations this past fall.  Ms. Raney stated partnerships have been the key to the success of GGCGC.  Grant requests for 2021 have been accepted; the awards ceremony will be held in April. She advised GGCGC is making a big difference in Greene County and the six contiguous counties. Ms. Raney stated they are looking forward to a “Yes” vote in 2021 to continue the progress being made in Greene County and the surrounding area.

Commissioner Gonseth Cheers expressed her appreciation for the partnership between the entities and all that is being accomplished.

Hearing no further comments or questions, Chair Kramer requested a motion.  Commissioner Gonseth Cheers moved to renew the license to conduct gambling games to Grow Greene County Gaming Corporation, renew the license to operate Wild Rose Jefferson, L.L.C. as a gambling structure, and renew the license to conduct sports wagering to Wild Rose Jefferson, L.L.C.  Commissioner Horbach seconded the motion, which carried unanimously.

Palo Alto County Gaming Development Corporation/Wild Rose Emmetsburg, L.L.C. (PACGDC/WRE): Steve Cody, General Manager, introduced Abby Burns, representing PACGDC. Ms. Burns stated Mr. Cody and the employees have been great to work with over the last year; they held meetings via Skype or Zoom, as well as in person.  She indicated the entities have a great relationship.  Ms. Burns stated Coaches Corner is open and has delicious food, which draws guests to the casino.  DraftKings has also been a wonderful success.  She highlighted some of the grants awarded last year: a self-contained breathing apparatus for the Emmetsburg Fire Department; the Sheriff’s Department received thermal binoculars; and additional smaller grants throughout the county. Ms. Burns advised there is a school award that is shared; last year it was $50,000, the five schools in the county each received $10,000 in addition to the actual school award specific to technology or other projects. Ms. Burns requested approval of the license renewal for PACGDC and WRE.

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Horbach moved to renew the license to conduct gambling games to Palo Alto County Gaming Development Corporation, renew the license to operate Wild Rose Emmetsburg, L.L.C. as a gambling structure, renew the license to conduct sports wagering to Wild Rose Emmetsburg, L.L.C., and approve the facility’s revised security plan included in the application.  Commissioner Olsen seconded the motion, which carried unanimously.

Upper Mississippi Gaming Corporation/Casino Queen Marquette, Inc. (UMGC/CQM): Don Ostert, General Manager, advised that Sindee Gohde, Executive Director of UMGC, was not able to be in attendance.  Mr. Ostert stated that even with the casino closure and other restrictions due to the pandemic, CQM paid over $4 million in state and local taxes and fees in calendar year 2020; of that amount, $207,000 went to Clayton County, $235,000 to the City of Marquette, and $442,000 to UMGC. They donated over $884,000 to the local community and area, which has a significant impact on the county of less than 18,000 residents.  Mr. Ostert advised UMGC provided funds to the Dollars for Scholars program, the Clayton County Food Bank, and several area police departments, the Edgewood Board of Economic Development for a trail project and many other projects. 

Mr. Ostert stated CQM understands it is a privilege to operate in the State of Iowa.  He advised the Commission should see an increase in capital spend in 2021 for items such as marketing kiosks, ticket redemption machines, preparation for a new slot accounting system, and several smaller projects listed in the application to improve the customer experience.  He requested approval of the license renewal on behalf of UMGC and CQM.

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Olsen moved to renew the license to conduct gambling games to Upper Mississippi Gaming Corporation, renew the license to operate Casino Queen Marquette, Inc. as an excursion boat that will not cruise, and renew the license to conduct sports wagering to Casino Queen Marquette, Inc.  Commissioner Horbach seconded the motion, which carried unanimously.

Commissioner Olsen noted the common theme throughout the license renewal process was that 2020 was the year everyone wants to forget; however, he noted that businesses that continued to reinvest in their company and stay ahead of concerns tended to weather the pandemic or other catastrophic issues with very little concern.  The ones that don’t invest back into the company dig the smallest hole possible to dig out of.  He stated as a Commissioner he is willing to give a pass for 2020-2021, but doesn’t feel the pass can last very long.  It is imperative the casinos reinvest in their properties. He indicated the expectations of what the casinos need to do will be higher in the future to maintain the privilege of operating in Iowa.  

IOWA GREYHOUND ASSOCIATION D/B/A IOWA GREYHOUND PARK: Brian Carpenter, General Manager and Director of Racing, requested approval of the 45-day plan for the 2021 racing season, which will be the 37th year of racing in Dubuque, and the 7th year under the Iowa Greyhound Association. He noted Iowa Greyhound Park had a good year in 2020. In 2019, the live export handle, on-track handle and import handle was $8 million for the year.  In 2020, they had almost $16 million dollars for the year.  Mr. Carpenter noted Iowa Greyhound Park is one of four greyhound tracks left in the country; they hope to have another good year.

Chair Kramer noted there is an increase in purses this year.  She inquired as to the plans regarding purses for next year.  Mr. Carpenter stated the Board is discussing the issue.  He advised there will be a shortage of greyhounds as several individuals stopped breeding with the Florida tracks closing at the end of 2020.  Oaklawn in Arkansas, which races year-round, has announced they are closing at the end of 2022.  He stated it is questionable as to whether there will be a sufficient number of greyhounds to race a full season in 2022. He feels there will be a sufficient number for this year, but it could be tight at the end of the season.  Mr. Carpenter stated the kennel compound is opening a month early to allow some of the dogs from Florida and Arkansas to be moved. The Board felt it would be better to offer better purses this year since the races would be full, and with the possibility they would not be able to have a full season next year they wouldn’t need as much money for purses next year.  Mr. Carpenter noted they have been able to reduce several expenses, which is also helping with the purse situation.

Hearing no further comments or questions, Chair Kramer requested a motion. Commissioner Gonseth Cheers moved to approve the season approvals as submitted with the following conditions:

  • The immediate written notification of any change in racing official positions.
  • The completion of necessary IRGC licensing and DCI background checks of racing officials.
  • The export contracts will continue to have the review and approval by IRGC staff to insure regulatory compliance.
  • Continuous review of racetrack maintenance issues and monitoring of injuries in cooperation with IRGC representatives.
  • Review and testing of the Sportech software upgrade submitted to IRGC racing stewards prior to the beginning of racing; with approval being subject to the successful testing and approval of that upgraded system by the stewards.
  • Walk through by IRGC staff to ensure all equipment is in working order and the facility is ready to accept the greyhounds.

Commissioner Horbach seconded the motion, which carried unanimously.

Mr. Carpenter submitted the following contracts for Commission approval:

  • United Healthcare – Health Insurance for Full-time Employees
  • City of Dubuque Police Officers – Security
  • Sportview Television Corp. – TV Control Center, Monitor System, Camera and Technical Support for Live and Simulcast Racing (OSV)
     

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Olsen moved to approve the contracts as submitted by the Iowa Greyhound Association d/b/a Iowa Greyhound Park.  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

PRAIRIE MEADOWS RACETRACK & CASINO, INC. (PMRC): Gary Palmer, General Manager, presented the following contracts for Commission approval:

  • Daktronics, Inc. – Tote Board Replacement (OSV)
  • Fortune Wisconsin – Meat and Seafood (OSV)
  • Midwest Ambulance Service of Iowa – Ambulance and Emergency Services
  • Waste Management – Waste Removal Services
  • Willis Auto Campus – Vehicles for Giveaway Promotions

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Horbach moved to approve the contacts as submitted by PMRC.  Commissioner Olsen seconded the motion, which carried unanimously.

PUBLIC COMMENT: Chair Kramer called on Preston Moore, Iowa State Director for The Humane Society of the United States. He noted he is a lifelong Iowa resident and attended Maquoketa High School. He indicated he has fond memories of his grandparents stating they were going down to the boats in the Quad Cities.  After he became an adult, he chose to responsibly visit the casinos, and even now makes it a point to stay at the casinos as he travels the state. 

Mr. Moore stated he is appearing before the Commission on behalf of the Humane Society, and also on behalf of the Stray Dog Policy and Grey2K.  He advised there are two pieces of legislation, SF 415 and HF 513, which are moving through the Iowa legislature quickly.  These bills will legalize simulcasting and wagering on international greyhound races.  He stated the referenced organizations have some concerns about simulcasting some of the international greyhound races, specifically those taking place in Mexico and Vietnam.  He stated these countries have very little or no documented animal welfare standards.  Mr. Moore stated they asked the legislature to consider an amendment to the proposed legislation; however, the legislature declined, stating they preferred the Commission use its existing authority to not permit simulcasting and wagering on those tracks.  Mr. Moore indicated the organizations are requesting the Commission to adopt the following policy: “The Commission shall only authorize telecasts of dog races from foreign jurisdictions that have established animal welfare programs, including a government regulatory scheme and drug testing program, a prohibition on the use of small animals as live lures in training, and public reporting of greyhound injuries or deaths.”  He stated the policy, if enacted, would solve the majority of their concerns and essentially prohibit simulcasting races from Agua Caliente in Tijuana, Mexico, or Lam Son Stadium in Vietnam.  Mr. Moore stated the policy is in line with the strongly held opinions of the vast majority of Iowans that animals deserve protections, and the currently held policy of the Iowa Greyhound Association, which prohibits the sale and export of greyhounds by IGA members to any country except Australia, Ireland, the United Kingdom and New Zealand.

Jon Moss, Executive Director of the Iowa Horsemen’s Benevolent and Protective Association, stated that when these types of issues are discussed with regard to the United States versus other countries, these are countries that typically have various views on animal husbandry.  There are some countries where cows are considered sacred or horse meat is a delicacy.  He stated if the United States/Commission is going to have to morally judge whether or not another nation or organization of society is not up to our standards we will not be able to sell our signal, even for horse racing, much longer.  Mr. Moss stated there are international treaties regarding the wagering that the US has entered into and the IRGC and US risk being fined by the World Trade Organization if the IRGC starts setting its own standards. He suggested the Humane Society of the United States reach out to federal legislators or other organizations involved in international matters.  He noted there are various issues occurring all around the world that we cannot control.  He reiterated that if we start making moral judgements, we would not be able to do business with any number of individuals and/or businesses.  Mr. Moss stated he found it ironic that The Humane Society of the United States and the local chapter are worried about dog racing in Mexico and Vietnam when they were one of the major supporters of the recent Horse Racing and Integrity Act which took away an efficacious drug, commonly known as Lasix, that is the only known treatment to reduce or prevent exercise induced pulmonary hemorrhaging in horses.

Mr. Carpenter stated he signed up in the event Commission members had any questions.  He stated he understands the arguments on both sides, but hopes the parties are able to find a middle ground which will allow individuals to bet on races in other countries as he estimates there will be no greyhound racing in the United States within five years. 

ADMINISTRATIVE BUSINESS:
Review of Year-to-Date Economic Impact Reports: Mr. Ohorilko stated Commission staff requests a review of the economic impact related to the casino industry in Iowa. Information requested relates to payroll and related expenses; equipment, supplies and services; statutory required payments; and charitable contributions and donations.  He advised the information received is unaudited, but feels it provides a true picture of the overall economic impact in the state of Iowa.  This year the information shows the economic impact in the four categories was over $888 million, which is down from past years.  Mr. Ohorilko stated that is still an astounding amount, and even more astounding is the amount spent with Iowa vendors, which is approximately 92% of the $888 million.  When items that cannot be purchased anywhere in Iowa such as gaming equipment or advertising in markets close to the border are excluded, the percentage spent with Iowa vendors increases to 96%. 

Notice of Horse Racing Promotion Fund: Mr. Ohorilko advised there is $1,601.72 in the fund available for FY 2021.  Applications are due in the Commission’s Des Moines office by April 1st.

Notice of Purse Amounts pursuant to Iowa Code § 99F.6(4a(3): Mr. Ohorilko stated these are the purse supplements as a result of the 11% of adjusted gross receipts at Prairie Meadows; 50% of the advanced deposit wagering revenue and 4% of the net sports wagering receipts for calendar year 2020.  For the current calendar year, the dollar amount is $11,461,788.72 for the thoroughbreds; $2,299,898.42 for the quarter horses and $1,319,613.84 for the Standardbreds.   

HEARINGS:
IOC Black Hawk County, Inc.: Mr. Ohorilko advised Commission staff and IOC Black Hawk County, Inc. have entered into a Stipulated Agreement for a violation of Iowa Code § 99F.9(5) related to underage gambling.  On September 27, 2020, an underage patron approached a turnstile at the facility with two adult companions. The security officers posted at the turnstile failed to request identification allowing the individual to enter the gaming floor unchallenged.  The underage individual did gamble, and was on the gaming floor for one hour and thirteen minutes.  Those three factors combined trigger the referral to the Commission consistent with the resolution.  Mr. Ohorilko advised IOC Waterloo has stated they completed monthly remedial training for the security staff.  They acknowledge the facts as set forth in the Stipulated Agreement are accurate, and have agreed to an administrative penalty in the amount of $20,000.

Mr. Moine concurred the incident occurred as set forth.  After the incident, management interviewed the security officer on duty.  Mr. Moine noted the security officer has had several instances prior to this one where he did challenge individuals that appeared to be underage and has successfully stopped several minors from entering the gaming floor.  They were interested in knowing what happened in this instance.  Mr. Moine stated the security officer did not have a good reason; he admitted all three looked young and knew he should have requested identification.  They asked the security officer if there was anything the facility could have done to better prepare him to prevent this situation.  The security officer stated the training received was adequate, he just didn’t follow through on procedures.  Mr. Moine advised the security officer’s employment has been terminated.  He also stated the facility has increased security wages across the board; the starting wage is now $13 per hour. They hope it will help the individuals in these positions take their job more seriously.

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Horbach moved to approve the Stipulated Agreement between IRGC and IOC Black Hawk County, Inc. with an administrative penalty of $20,000.  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

Prairie Meadows Racetrack and Casino, Inc.: Mr. Ohorilko advised Commission staff and PMR&C have entered into a Stipulated Agreement for a violation of Iowa Code § 99F.9(5) related to underage gambling.  On October 24, 2020, two underage males attempted to enter the facility with four adult companions.  The security officer at the entrance requested identification from one but not the other. The underage patrons were on the gambling floor for two hours and forty-five minutes.  Both gambled and came into contact with other facility employees.  Those three factors combined trigger the referral to the Commission consistent with the Resolution.  Mr. Ohorilko advised PMR&C has agreed to an administrative penalty in the amount of $20,000.

Mr. Palmer introduced Jake Hitchcock, Director of Security, who spoke to the violation.  Mr. Hitchcock stated PMR&C takes responsible gambling seriously.  He noted the security officer has been employed by the facility for 26 years, and is still employed.  Mr. Hitchcock has provided extended training with regard Iowa licenses and identification cards to out-of-state identification cards.  Mr. Hitchcock stated the security officer thought two of the individuals were twins and did not request identification from both of them.  The security officer has been disciplined for this infraction.

Hearing no comments or questions, Chair Kramer requested a motion.  Commissioner Olsen moved to approve the Stipulated Agreement with PMR&C for a violation of Iowa Code § 99F.9(5) with an administrative penalty of $20,000.  Commissioner Horbach seconded the motion, which carried unanimously.

Robert Roe – Appeal of Administrative Law Judge’s Proposed Ruling: Chair Kramer stated the next item on the agenda is a contested case decision issued by an Administrative Law Judge (ALJ) in Case No. 21IRGC0002 - Robert Roe vs. IRGC.  Chair Kramer advised the Commission will review the Decision, but this is not a rehearing of evidence.  She stated the Commission will hear a ten minute argument from each side with the Appellant going first.  After the arguments, each side will receive an additional five minutes for rebuttal, which may be waived.  Chair Kramer stated the Commission would conduct the second appeal after concluding arguments on the first appeal and go into Executive Session one time to deliberate both appeals. 

Mr. Roe stated he is a licensed trainer in Iowa, and a resident of Polk County. He stated the issue is whether the Board of Stewards’ decision to suspend his license for 365 days for a horse in his care testing positive for a Class I drug on September 20, 2020 was correct and legal. 

Mr. Roe stated the Commission conducts drug testing on all horses that finish first or second in a race.  On October 7, 2020, the Board of Stewards received two reports that the Appellant’s horse had a positive test during competition testing.  The first report stated Sample #E398797 from “Candy My Boy” who finished second in the ninth race on September 20, 2020 tested positive for Mitragynine and 7-Hydroxymitragynine in the blood and urine.  The second sample, #E398707, from the same horse who finished second in the first race on September 28, 2020, tested positive for the same two substances.  Kratom, the marketed name for the drug, is listed as a Class 1 drug, with a Class A penalty by the Association of Racing Commissioners International (ARCI), which is a non-regulatory not-for-profit organization that sets model rules and guidelines and makes recommendations for drug violations.  Mr. Roe stated Iowa has not adopted the ARCI Model Rules, and that the ARCI has no authority to impose any of their penalty recommendations or guidelines.

Mr. Roe advised Kratom is legally sold as a natural botanical supplement that is readily available over the counter.  The DEA, FDA, World Anti-Doping Agency and United States Anti-Doping Agency do not list Kratom as an illegal or prohibited substance, and there is no known scientific study in the United States supporting the theory that Kratom possesses the highest potential to affect performance.  Mr. Roe stated he contacted industry leaders in equine research and medicine to determine if there was any scientific study supporting Kratom as a performance enhancing substance.  He stated he provided two studies, including two separate controlled substance act 8-factor analysis from two independent organizations; both confirmed the effects of Kratom are closer to caffeine and produce a mild stimulant effect with a low potential for abuse and risk to public health.

Mr. Roe stated a hearing was held at the Board of Stewards Office located at PMR&C on October 22, 2020.  The decision of the Stewards was published in Ruling No. 46165.  A telephonic hearing before an Administrative Law Judge was held on January 13, 2021; the ALJ affirmed the Stewards’ ruling suspending his license. 

Mr. Roe cited the rules utilized by the Board of Stewards in issuing their ruling, as well as a section of the 2020 condition book issued by Prairie Meadows.  He also submitted documentation which he felt called the integrity of the stewards into question, and showed bias against him stemming from an incident that occurred in 2019.  Mr. Roe stated many of the drugs ARCI classifies as Class I are Schedule II substances per the Drug Enforcement Agency.  He reiterated that Kratom does not qualify as a Class 1 drug under the ARCI classification.  Mr. Roe also noted the ALJ indicated in the proposed ruling that the Stewards considered mitigating circumstances when assessing a smaller fine, which he feels was incorrect.

Mr. Roe stated his suspension in Iowa is recognized by all racing jurisdictions; therefore, he is currently serving the suspension.  He has not raced a horse since September 28, 2020, and will have served 125 days of the suspension through February 24, 2021.  He has paid the $1,000 fine.  He stated there are multiple instances across the country where racing authorities have stayed a portion of a trainer’s suspension provided there were no medication violations during the stay.  Mr. Roe requested a stay of the final six months of his suspension provided there were no further medication violations. 

David Ranscht, Assistant Attorney General representing the Board of Stewards, stated they had heard allegations of conflict of interest, perjury and bias stemming from a different horse not at issue in this case.  He stated Mr. Roe’s case is very simple: Mr. Roe’s horse tested positive for two substances, commonly known as Kratom, after two separate races.  Mr. Roe has acknowledged he is the reason the horse had Kratom in his system; he had bought the substance for himself and accidentally spilled it in the horse’s joint supplement while mixing his own tea.  That is the foundation for this case, and shows a violation of the rules occurred.  Mr. Ranscht stated the rule Mr. Roe violated is Administrative Rule 491-10.7(A) which states that horses cannot race with any medication, drug, foreign substance or metabolic derivative in a horse’s body when the substance is a narcotic, could serve as a local anesthetic or tranquilizer, or could act as a stimulant or depressant.  Mr. Ranscht reiterated the horse raced with Kratom in its body, and Mr. Roe is responsible for the substance being in the horse. In determining the sanction, the Board of Stewards considered several factors, and ultimately suspended his trainer’s license for a year and imposed a $1,000 fine.  The ALJ upheld the penalty, and the appeal before you questions whether the penalty was appropriate or authorized under the circumstances.  Mr. Ranscht stated the license suspension and penalty were appropriate, and indicated the Commission should uphold the Board of Stewards’ Ruling.  He stated the assertions set forth by Mr. Roe are not reasons to alter the penalty.  Mr. Ranscht noted Mr. Roe argued that Kratom does not affect the horse’s speed; however, the rule prohibits substances that could act as a stimulant or depressant.  Mr. Roe stated Kratom produces affects similar to caffeine, which is a stimulant.  The regulatory framework for medications and other substances is that a substance is prohibited unless the Commissions says it should be allowed. Iowa Code Section 99D.25(3)b allows the Commission to establish permissible trace levels for substances they determine to be innocuous.  While the Commission has established permissible levels for some substances, Kratom is not one of them and is therefore, presumably unlawful.  Under Mr. Roe’s argument, all substances would be presumed to be allowable unless specifically identified, which is not how the framework operates.  Mr. Ranscht stated there is a source of identifying Kratom as a prohibited substance, and that is ARCI’s Model Rules.  He noted there has been a question raised as to whether the rules ARCI puts out are binding.  Without a document stating otherwise, Mr. Ranscht agrees they are not; however, that does not mean they are worthless.  They can, and should be, considered as a source of information as a part of the Stewards’ exercising their own considerable discretion to craft an appropriate penalty for violations.  Mr. Ranscht noted Mr. Roe argued Kratom has been misclassified by the ARCI as there is no known study showing it to be performance enhancing.  He stated it is not necessary for the substance to effect performance to be prohibited, and secondly, there is no known study supporting Kratom as being safe and legal for use in racehorses.  He stated there are communications on record indicating the substance should not be in a horse.  To the extent there is a contention the medication rule is vague and ambiguous because environmental conditions could affect the horse’s speed, those are not medications or foreign substances.  Mr. Ranscht stated the Commission could affirm the suspension and fine without even looking at the rules.  Rule 10.7 and the trainer responsibility rule are enough on their own as they prohibit a substance that could be a stimulant or a depressant and puts that responsibility on the trainer.  Accepting that at face value, the substance is prohibited and a violation occurred.  In consulting the ARCI rules in an advisory, but not mandatory sense, only confirms the ARCI and other racing jurisdictions would treat the substance similarly.  Mr. Ranscht stated the ALJ’s Proposed Decision recognized all of the above.  He noted the ALJ did not surmise the ARCI rules are binding; the Proposed Decision takes notice of the model rules while understanding them to be guidelines and notes the Commission has broad authority to take action against any licensee upon finding a rule violation.

Mr. Ranscht took time to address the bias allegation, stating it is not reasonable to say the stewards punish you for admittedly causing your horse to test positive.  Secondly, violating the rules is supposed to hurt a little bit as it serves as a deterrent for future violations not only for the individual trainer, but all other trainers as well.  Additionally, a clean record can be, and was, considered a mitigating factor.  With respect to the recusal issue, there is a case that went before the Iowa Supreme Court which states being a member of two related agencies does not necessarily create a conflict of interest, which would be applicable here.  Mr. Ranscht stated Mr. Roe is asking for a reduction in the suspension from one year to six months.  He stated the Commission has the discretion to do so; however, the crux of the case is Mr. Roe, the trainer, admits the horse tested positive for Kratom due to his actions and knowingly allowed the horse to ingest the substance. Mr. Ranscht stated the facts as presented support the original penalty imposed, and the Commission should affirm the Proposed Decision.

Mr. Moss, on rebuttal for Mr. Roe, stated the IHBPA does not necessarily disagree with any of Mr. Ranscht’s points, but clarified a couple of points.  He stated that while there is a discussion and deliberations regarding a punishment for what occurred, the IHBPA does not have an issue with the fact that there is a penalty that is being administered; it is the fact there are multiple facets.  Mr. Roe didn’t just receive a one-year suspension; part of the penalty process is that the horse is disqualified and lost the purse from winning.  He pointed out that Mr. Roe is not asking for an expungement; he is asking for a reduction in the length of the suspension.  Mr. Moss stated Mr. Roe has already paid a pretty high price for the infraction.  He stated the IHBPA wants a high price to be paid when individuals cheat.  Mr. Moss concurred the ARCI guidelines are not completely worthless; however, Kratom is 100% misclassified as a Class 1 drug with a Class A penalty.  He noted there are approximately 1100 drugs or substances on the list.  When the ARCI receives information about a new substance or drug, they immediately try to classify it at the highest level and penalty until further information is available.  The ARCI guidelines are a 72-page document, which sets forth multiple classes of substances and penalties.  Mr. Moss stated the disparities and misclassifications in the ARCI drug classifications need to be dealt with immediately.  A caffeine positive is a Class 2 drug and Class B penalty.  From the information provided by Mr. Roe, it appears that would be the most appropriate penalty, which would still disqualify the horse and result in the loss of the purse money.  The penalty is only a 15 or 30 day suspension of the license. Mr. Moss stated from the information provided, the stewards didn’t try to evaluate the classification that the drug should be since ARCI did not follow up.  He stated he has started the process with the ARCI model rules committee to reclassify Kratom.  He feels the biggest issue is the misclassification of Kratom by the ARCI.  Mr. Moss stated his belief that Mr. Roe has served his punishment, and there are other penalties that are ongoing.

Commissioner Horbach asked Mr. Moss his opinion as to the maximum fine and suspension available to the stewards and ALJ at the time.  Mr. Moss stated the maximum fine that can be assessed by the stewards is $1,000, and the maximum suspension is five years. 

Mr. Ranscht waived his rebuttal, unless the Commission had questions.  As there were none, Chair Kramer moved to the next hearing.

Steven Asmussen – Appeal of Administrative Law Judge’s Proposed Decision: Chair Kramer stated the next matter on the agenda is a contested case decision issued by an Administrative Law Judge (ALJ) in Case No. 20IRGC0011 – Steve Asmussen vs. IRGC.  She stated the Commission would review the decision, but will not rehear the evidence.  The Commission will hear a ten minute argument from each side with the Appellant going first.  After the arguments, each side will receive an additional five minutes for rebuttal, which may be waived. 

Clark Brewster, legal counsel for Mr. Assmussen, thanked the Commission for allowing the proceedings to occur telephonically.  He stated he is a longtime horseman, and has owned horses in various racing jurisdictions since 1989, and has had over 3,000 starters since 2000. 

Mr. Brewster stated the situation in this case is one of the most patently unfair circumstances that he has seen in connection with a called positive on a trainer.  He stated the parties agree on almost all of the facts by virtue of ALJ Lindgren’s ruling.  Mr. Brewster noted the race occurred on July 5, 2019; a horse named Shang finished second in the stakes race at PMR&C.  The horse was one of six horses shipped to PMR&C by Mr. Asmussen to race in various stakes or allowance races over seven or eight days and were stabled in the stakes barn.  After the race, the horse was taken to the testing barn for blood and urine samples to be drawn, which were shipped to Industrial Laboratories, the primary lab for IRGC.  The lab results showed the horse had Atenolol in its system at 1.99 ng/mL.  A split sample showed contamination at 1.2 ng/mL.  Mr. Brewster pointed out that Atenolol is a beta blocker commonly used, and is one of the top 100 prescribed medications worldwide, for hypertension in humans.  All parties concur the amount detected is extremely low, and ALJ Lindgren stated it would not have given the horse any competitive edge.  Mr. Brewster stated the stewards did not know what Atenolol was, and had to research the drug.  Mr. Brewster stated no one with contact with the horse in Mr. Asmussen’s employment that they were able to interview was taking the drug nor heard of it.  Upon further investigation, it was determined Atenolol is a common environmental contaminant and can remain at stable levels for an extended period of time.   They questioned how the drug came to be in the horse, and found numerous studies in Iowa showing it is in the water, and has been reported by the Iowa Water Board.  He noted tests have been conducted on Altoona’s water supply, which comes from the Des Moines River, and Atenolol was present. Mr. Brewster summarized the facts of Mr. Asmussen’s case: Atenolol was in the Iowa water, and the amount found was extremely low, which would not affect the performance of the horse.  The issue is how to deal with the contaminant.  Mr. Brewster stated the ARCI recently published an article urging screening levels for human recreational substances.  The article stated inadvertent exposure of horses in the environment dictates that trace amounts can be transferred to horses by means beyond the trainers’ control such as soil contamination, trace contact with foods or touching the lips of the horse.  It further states no impact on the physiology of the horse must be dealt with in the light of day using common sense.  He noted with the extremely sensitive testing equipment being utilized, trace positives are becoming common place. These positives affect all the stakeholders in the industry – trainers who are penalized with purse redistributions, fans are disenfranchised because the horse is disqualified creating an illusion that the drug positive was a result of an illegal substance, and taxpayers who are forced to spend tax dollars enforcing unenforceable regulations.  Mr. Brewster reiterated there has to be a common sense solution. Part of that is recognizing that inadvertent environmental exposure occurs that results in no physiological effect on the animal, which must be accounted for by regulatory agencies such as the Commission to protect the integrity of the sport and preserve its reputation.  This would prevent unfairly penalizing trainers and owners for inadvertent environmental exposure and negatively impacting the perception of the sport when trace positives have no adverse impact on the integrity of racing.  Mr. Brewster stated in the case before the Commission the trainer absolutely did not administer the medication, which was the finding of the stewards and the ALJ; it is a chemical that is environmentally present as it has been found to be in the water source and did not impact the race. 

Mr. Brewster stated the reasoning of the stewards was based on no evidence at all and is also contained in the ALJ’s proposed decision.  The position was that since no other horse tested positive for Atenolol, then Mr. Asmussen must have done something wrong.  He noted there is no evidence no other horse had Atenolol in its system; this is the only horse that was reported.  He stated testing labs routinely engage in screening tests to screen out, on their own judgement, these types of environmental contaminants.  There is no way to know why the horse was slightly above the screening limit; no one was able to obtain the screening limit from the lab or talk to the lab about it.  Mr. Brewster closed his comments by reading a quote from an article written by Steward Tanya Boulemetis, which was published in September 2016: “With today’s sophisticated testing methods, incontestable trace levels from inadvertent environmental exposure that no trainer, regardless of how careful, can possibly avoid can result in career ending penalties.”  She also stated other substances similarly identified in other jurisdictions and found to be of no threat to the integrity of racing and deemed likely to result from inadvertent environmental contamination, the mandatory penalty for trainers for trace environmental exposure positive test is a very dangerous precedent. Racing commissioners that have foresight and are concerned with the actual integrity of racing recognize that calling trace levels of environmental substances as positives only darken the reputation of the entire racing industry and does nothing to identify and deter the real threats to racing or protect the racehorse. Such focus on inadvertent environmental exposure diverts resources and time from the necessary goal of identifying actual cheating.”  Mr. Brewster stated the ruling is based on the absolute insurer rule – the trainer is absolutely responsible.  The other rules cited in this case are not applicable to the facts that were found; stewards found that Mr. Asmussen did not administer the medication and that it was an environmental contaminant; that the amount found was incontestable and did not affect the race.  Mr. Brewster pointed out that ALJ Lindgren struggled with the idea of an absolute insurer rule, which means the trainer is held responsible for any kind of environmental contaminant that appears in a horse’s blood post-race; the trainer is fined, the purse is taken away, and based on a point system, could be barred from the sport.  He stated this is adverse to any common and fair principle, and must stop. 

Mr. Ranscht stated Mr. Asmussen received a $1,000 fine and did not receive any suspension from the stewards or the ALJ.  He stated that is not a career-ending penalty.  The trainer responsibility rule under which the fine was imposed has long been recognized as an essential tool in the racing regulators’ toolbox.  It does not operate illegally or unconstitutionally, and didn’t do so in this case.  Mr. Ranscht stated the Commission should uphold the fine.  He noted trainers are responsible for preventing the administration of drugs and other substances, but are also separately responsible for the presence of any medications or substance regardless of administration or what third parties do.  These rules are different and a separate basis for disciplinary action, including fines, against a trainer.  He stated that even if Mr. Asmussen did not administer the substance to the horse or authorize someone else to do so, he is responsible for the positive test. This is a common condition of licensure in racing jurisdictions, and has been upheld as legal and constitutional in several different states.  Mr. Ranscht stated the trainer responsibility rule says trainers are responsible for the condition of their horses, and in the absence of evidence to the contrary, for the presence of the drug. The absence of substantial evidence to the contrary doesn’t modify the presence or whether a violation occurred.  The way to present the substantial evidence is to show the drug wasn’t actually present; that perhaps a false positive occurred that is being called into question when you send a split sample and it comes back clean; or there was an inadvertent label swap.  Second, if administration was a necessary condition to a violation of the trainer responsibility rule, Rules 10.5(1)(a)(1) and 10.5(1)(a)(2) would duplicate one another.  He stated the Commission, like any court, has to presume the entire rule and all language matters and there is no surplus.  Third, there is no similar substantial evidence carve out in the prohibited substance rule which says no horse shall carry prohibited substances.  The environmental contamination argument does not matter for that rule because even though it is an environmental contamination, the horse still carried the substance in its body.  The distinction between affirmative administration and responsibility is really important.  The trainer responsibility rule already anticipates that there may be times when there is no direct evidence of how a drug got into a horse’s system; but it places responsibility on the trainer regardless of the acts of third parties.  Mr. Ranscht stated the allocation of responsibility makes sense because trainers are in the best position to prevent a horse from racing with illegal drugs or other prohibited substances in its system.  The stewards recognized there was at least a question of environmental contamination and gave Mr. Asmussen the benefit of the doubt, which is why they only imposed a fine without a correlating suspension.  In contrast to the first appeal before the Commission today, there was no direct admission or acknowledgement that the reason the horse tested positive was the trainer’s own acts.  These facts represent a part of the balancing act the stewards must do on a daily basis when they are deciding whether to impose penalties.  In this case, they decided to levy a fine with no suspension.  Mr. Ranscht stated that was a reasonable balance as was the application of the trainer responsibility rule.  Mr. Ranscht stated the Commission should uphold the $1,000 fine.

Mr. Brewster stated this case could be very damaging to Mr. Asmussen as Iowa also subscribes to the mandatory penalty for trainers; therefore, the multiple medication violation provision of the Racing Medication and Testing Consortium (RMTC) is applicable.  This is a points violation which could result in a lengthy suspension should Mr. Asmussen be fined for a slight overage on some other therapeutic medication.  He takes issue with the idea that Mr. Asmussen should accept the fine.  Secondly, Mr. Asmussen lost a purse of $15,000, which Mr. Brewster called a substantial penalty for a medication substance that has no bearing on the outcome of the race.  Mr. Brewster pointed out that the rules cited by the stewards were the ones that directly involve the trainer administering the medication; however, the substance was not administered, it was an environmental contamination. He states those rules were not violated.  The issue then becomes whether the trainer is responsible.  In this instance, the question is whether there is substantial evidence to the contrary with regard to running a horse that has some medication subsequently found in its system.  Right now the industry is dealing with many reviews and changes in environmental contaminants by the ARCI and other jurisdictions.  They are finding out that many of these medications are either watersheds or reside as a stable chemical in stalls.  These are changing the dynamics in regulatory law and in recommendations by the ARCI.  Mr. Brewster called this situation form over substance; it does not do anyone any good to hold a trainer responsible per the responsibility rule when the only way to avoid the violation was to not water the horse.  He noted there is a rule which states the racing authority has a responsibility to provide water, which is the source of the contamination in this case.  Mr. Brewster referenced an article in the Altoona paper discussing major contaminants in the water supply in Altoona and the evidence that this was clearly environmental contamination.  He asked what principle could be advanced by fining Mr. Asmussen and taking away the purse.  He stated it would be unfair for an individual to test positive to Atenolol and be terminated from their job because of it just because they drank the water.

Mr. Ranscht referenced Mr. Brewster’s comments regarding the screening limits. He stated that accepting the screening limits as an important factor and Atenolol allegedly in the water of Altoona, you would still think that more than one horse in the entire race meet would have tested positive above the screening limits.  He stated that is an important fact that needs to be acknowledged and addressed.  Mr. Ranscht waived the rest of his rebuttal time.

Chair Kramer requested a motion to go into Executive Session.  Commissioner Gonseth Cheers moved to go into Executive Session pursuant to Iowa Code Section 21.5(1)f for the purpose of discussing the decision to be rendered in a contested case conducted according to the provisions of Iowa Code Chapter 17A.  Assistant Attorney General William Hill will be acting as counsel for the Commission.  Commissioner Horbach seconded the motion, which carried unanimously on a roll call vote.

Upon returning to the open meeting, Chair Kramer requested a motion regarding the appeal hearing for Robert Roe vs. IRGC.  Commissioner Olsen moved to affirm the Administrative Law Judge’s Proposed Decision for the reasons set forth in the Proposed Decision.  A written ruling will be distributed consistent with this determination.  Commissioner Horbach seconded the motion, which carried unanimously.

Chair Kramer requested a motion regarding the appeal hearing for Steve Asmussen vs. IRGC.   Commissioner Horbach moved to affirm the Administrative Law Judge’s Proposed Decision for the reasons set forth in the Proposed Decision. A written ruling will be distributed consistent with this determination.  Commissioner Gonseth Cheers seconded the motion, which carried unanimously.

As there was no further business to come before the Commission, Chair Kramer requested a motion to adjourn.  Commissioner Horbach moved to adjourn the meeting.  Commissioner Olsen seconded the motion, which carried unanimously.