The state's largest casino, Prairie Meadows, in Altoona, is facing a federal review of its nonprofit status, raising big concerns.

Prairie Meadows pays over $14 million every year to pay off construction debt at the Iowa Events Center.

If the Internal Revenue Service revokes the casino's tax-exempt status, that money would, for the most part, disappear.

Polk County Supervisor Tom Hockensmith told KCCI that without Prairie Meadows, the facilities would simply not exist.

Prairie Meadows board members met behind closed doors Friday, discussing potential litigation to defend its status as a nonprofit organization.

The casino's financial records have been under IRS watch for 18 months.

“That surprised us,” said Prairie Meadows attorney Tom Flynn. “We were bewildered by that, and as we look at the facts and at the law, we are confident we should have that tax status. And it should not be revoked.”

Online tax records show the casino generated $2.1 billion in revenue in 2013.

Flynn said 85 to 90 percent of revenue is paid out to customers in slot machine winnings.

The real annual net revenue is around $190 million.

Losing its nonprofit status would jeopardize about $20 million awarded in grants benefiting the community.

“We’ve received anywhere between $400,000 to $500,000 from Prairie Meadows,” Flynn said.

Des Moines Public Schools spokesman Phil Roeder said the district counts on casino contributions every year for technological improvements.

This year, the district plans to spend $450,000 on musical instruments.

“We’ve seen a huge increase in band and orchestra participation over the last couple of years in the school district, so we really want to make that investment and provide instruments to as many kids as we can who cannot afford them,” Roeder said.

In 2012, Polk County received $26 million; Des Moines received $5 million; Altoona received $1 million; area Polk County schools received $800,000 and different charities received $4 million.

Flynn denied the audit was sparked by Prairie Meadows CEO Gary Palmer's salary, who makes about $650,000 a year.

The casino went through a similar audit about 10 years ago.

It is unclear when the IRS will complete its review.