As reported by: The Des Moines Register
You hear the question all the time: Why does Iowa have budget problems when the state gets all that money from gambling? The answer is that gambling revenue isn't that much.

But it helps, and it ought to be more. State revenue from gaming last fiscal year was $182.6 million - from racetracks with slot machines and riverboat casinos but not American Indian casinos, which aren't subject to state taxation. Add $38.9 million from the Iowa Lottery. The total of $222 million is a nice chunk of change, but it's no jackpot.

It's more than the cigarette tax ($88.1 million in fiscal year 2003).

It's more than the insurance premium tax ($142.2 million).

It's almost as much as the corporate income tax ($237 million).

It's somewhat less than the use tax, the tax on goods and services purchased outside the state ($254.2 million).

It's a lot less than the sales tax ($1.45 billion). And even less than the personal income tax ($2.4 billion) or local property taxes ($3 billion).

Relative to the major taxes, gambling is a minor source of revenue.

An October consultant's report for the Iowa Racing and Gaming Commission suggested another $200 million in net revenues from new casinos is possible. Cummings Associates of Arlington, Mass., also noted: "Waterloo and Cedar Rapids are the only major markets that appear to offer substantial promise without major adverse impacts on some of Iowa's existing gaming facilities." What the consultant couldn't have known was that Linn County voters, home to Cedar Rapids, would reject a riverboat casino proposal Nov. 4.

Not every county wants gambling. So far this year, voters in Dickinson and Cerro Gordo counties as well as Linn have said no. Voters in Palo Alto, Worth, Black Hawk and Wapello counties have said yes, although that doesn't mean they'll actually get casinos.

State gambling regulators last month said they want lawmakers to weigh in on whether to increase the number of casinos in Iowa. In 1998, the gambling commission adopted a moratorium on new casino licenses through the administrative rule-making process, but none of the current five commissioners was serving at the time.

Iowa has 10 riverboat casinos, three racetracks with slots and three American Indian casinos. Pressure to expand is coming from several directions - including support for a riverboat casino on the Des Moines River in downtown Des Moines. The casino would spoil the family friendly ambiance of downtown, which soon will have a new events center, science center and riverwalk. If Des Moines-area voters want more gambling, it would make better sense to change the law so Prairie Meadows Racetrack and Casino in Altoona could operate table games such as blackjack and roulette - as riverboats do.

Pressure not to expand gambling is considerable, too. A recent Register Iowa Poll found 69 percent of Iowans don't want more casinos. But 53 percent said the state lottery, riverboat casinos and dog and horse tracks have been good for Iowa. They have offered a leisure activity for adults and a new source of government revenue.

Of the $182.6 million the state took in from gaming last year, the first $60 million went into the general fund, $15 million went to the Vision Iowa Fund to pay off bonds, $5 million went to the School Infrastructure Fund to pay off bonds, $75 million went to the Endowment for Iowa's Health, established as a result of the tobacco settlement, and $27.6 million went to the Rebuild Iowa Infrastructure Fund, which is used for construction projects. The $38.9 million from the lottery went into the general fund. Lottery officials hope for an extra $20 million annually for the state from high-tech video pull-tab machines in taverns, restaurants and fraternal clubs.

All that makes it hard to remember church bingo used to be illegal in Iowa. In 1972, voters swung open the door to change by repealing the section of the state constitution that prohibited gambling. Today, it makes sense for any county that wants a casino to have one - why favor some over others? - and let the marketplace sort out which ones will survive.

New casinos couldn't be built in time to ease the budget crunch this year or next. Longer term, more gambling revenue still wouldn't come close to displacing sales, income or property taxes. But if there's an additional market for gambling in Iowa, it might as well be tapped to supplement the other streams of public revenue.