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Kopecky v. Iowa Racing and Gaming Commission

Supreme Court of Iowa

March 10, 2017

EUGENE J. KOPECKY, Appellant,
v.
IOWA RACING AND GAMING COMMISSION, Appellee.

         Appeal from the Iowa District Court for Linn County, Ian K. Thornhill, Judge.

         A citizen appeals a district court judgment affirming the Iowa Racing and Gaming Commission's declaratory order. AFFIRMED.

          Eugene J. Kopecky of Ackley, Kopecky & Kingergy, L.L.P., Cedar Rapids, pro se appellant.

          Thomas J. Miller, Attorney General, David M. Ranscht and Jeffrey C. Peterzalek, Assistant Attorneys General, for appellee.

          WIGGINS, JUSTICE.

         A citizen appeals from the district court's ruling on judicial review. The district court affirmed the Iowa Racing and Gaming Commission's declaratory order in which the Commission used its rules to conclude that its authority under Iowa Code chapter 99F permits it to consider the economic effect of a new gaming operation on existing gaming facilities when deciding whether to issue a new gaming license. On appeal, we hold the rule allowing the Commission to consider the economic effect of a new gaming operation on existing gaming facilities when deciding whether to issue a new gaming license is not "[b]eyond the authority delegated to the agency by any provision of law or in violation of any provision of law" under section 17A.19(10)(b) (2015).

         I. Background Facts and Proceedings.

         In March 2013, the citizens of Linn County approved a referendum to permit gambling games in the county. Soon thereafter, an organization in Linn County applied to the Commission for a license to operate a new gambling structure. The Commission ordered two independent market feasibility studies, and both studies concluded the casino market in Iowa was not underserved, and a new casino would cannibalize revenue from existing gambling facilities. Relying on the market studies and citing the significant economic impact granting a new gambling license could have on existing facilities, the Commission denied the organization's application in April 2014.

         On March 9, 2015, Eugene Kopecky, a resident of Linn County, filed a petition for declaratory order with the Commission. Kopecky was not associated with the organization whose application for a license was denied in 2014. In his petition, he stated he "plans to file an application with the [Commission] to secure a gambling license to conduct gambling games in a licensed gambling structure in Linn County, Iowa." However, he believed it would "serve no purpose for [him] to file an application for a license" because the Commission denied a previous application due to "the negative impact on existing license holders in other Iowa counties."

         Kopecky contended the Commission's consideration of that factor in denying an application is "contrary to Chapter 99F of the Iowa Code" and that it is necessary to determine the proper meaning and construction of the Code as it relates to issuing a gaming license when the residents of a county have approved a gambling referendum. Thus, Kopecky asked the Commission to answer two questions:

Question Number One:
Whether or not the [Commission] can use the existence of a gambling license in one county, or the impact on an existing gambling license in one Iowa county, when considering whether or not to issue a gambling license in another (different) Iowa county?
Question Number Two:
If the [Commission] has adopted administrative rules that are contrary to Chapter 99F of the Iowa Code are those administrative rules null and void?

         He asserted the answer to question one is no, and the answer to question two is yes.

         On April 9, the Iowa Gaming Association (IGA), an association comprised of eighteen existing gambling licensees, intervened in the declaratory order proceedings because the answers to Kopecky's questions would affect the existing licensees. In its brief in support of its petition for intervention, the IGA asserted that the Commission has broad powers to regulate all gambling operations under Iowa Code chapter 99F and that Kopecky misinterpreted the Code as well as the Commission's rules. After hearing oral argument from Kopecky and the IGA at its June meeting, the Commission announced its decision.

         The Commission answered Kopecky's first question in the affirmative, concluding Iowa Code chapter 99F and the administrative rules "allow and/or require" it to consider the impact on an existing casino in one county when considering whether or not to issue a gambling license in another county. With respect to Kopecky's second question, the Commission determined it did not have jurisdiction to answer the question, as it is within the court's purview to determine whether an administrative rule is ...


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