Last year voters in Linn County and Greene County approved proposals for new casinos for Cedar Rapids and Jefferson. But backers of those projects won’t welcome the new report commissioned by the Iowa Racing and Gaming Commission.
William Petroski reported for Des Moines Register,
The Union Analytics report estimates base gaming revenue of $82.3 million at the Cedar Rapids casino, but it says $66.8 million would come from surrounding casinos. It says Riverside Casino, about 12 miles south of Iowa City, would be hit the hardest. Similarly, Union Analytics says the Jefferson casino would generate $33.2 million annually in gambling revenue, and with $31.1 million coming from from other Iowa casinos. It says Prairie Meadows Racetrack and Casino at Altoona and the Wild Rose Casino at Emmetsburg would suffer the biggest losses of customers.
Marquette Advisors says it estimates $81 million million annually in gambling revenues for a Cedar Rapids casino, and it says $59 million would come from cannibalizing surrounding casinos.The report says the Riverside casino would sees its estimated gambling revenue in 2017 plunge from $91 million to $66 million, a drop of $25 million.
Meanwhile, Marquette Advisors estimates a Jefferson casino would generate about $28 million annually in gambling revenue, with about $22 million obtained by cannibalizing the business of surrounding casinos. This would include $6 million from Prairie Meadows, $4.5 million from Meskwaki casino, $3.2 million from the Emmetsburg casino, and $8.3 million from several other casinos.
In other news, water is wet.
Just a few years ago, the Iowa Racing and Gaming Commission rejected applications for new casinos in Fort Dodge, Ottumwa and Tama County despite strong public support. Commissioners determined that those projects would primarily draw business away from Iowa’s existing casinos. They approved a new casino for Lyon County in Iowa’s northwest corner, on the grounds that it would draw a lot of out-of-state business.
For those reasons, I’ve been skeptical that new casinos would get the green light. On the other hand, Governor Terry Branstad has replaced several members of the Racing and Gaming Commission since 2011. Last year I heard that casino backers in Greene County and Linn County were confident they would win approval. Branstad has close ties to key figures supporting the Cedar Rapids project.
Any relevant comments or predictions are welcome in this thread. Whether or not any new casinos are built in Iowa, I agree with the assessment two economists shared on Iowa Public Television last year: casinos are generally poor economic development projects.
UPDATE: The Cedar Rapids Gazette’s Todd Dorman comments that the Cedar Rapids casino promoters just took “two brutal roundhouses to the jaw.”
Backers still have cards to play.
They can play the all-American, competition-is-good card. New competition would force existing casinos to step up their game. That’s how our marketplace is supposed to work. […]
But Iowa’s casino industry isn’t really a market. It’s a cartel that controls who gets slices of the gambling pie, while serving a big, fat slab to state government. In return, state government and its commission watch over those casinos like shepherds watching over sheepshearers. The state has encouraged investors to build large, pricey destination casinos. And the state will do all it can to protect them from undue competition. […]
Backers here also can point to the casino’s role in the city’s flood recovery effort. Comeback City, remember? But I didn’t get a sense from commissioners I spoke with last month that recovery tugged their heart strings. It all boiled down to those market studies. They would be the determining factors. […]
If its [Racing and Gaming Commission] members see the studies as a knockout, they may not see a need for the long count to last until April. Next week’s meeting in Altoona, when the studies are formally presented, will be big.
Governor Terry Branstad has close ties to backers of the Cedar Rapids casino project but told reporters that he will stay out of the decision:
The governor repeatedly said that he has never involved himself in gaming license decisions “and I intend to do that” in this case, he told reporters.
“This is the responsibility of Racing and Gaming Commission,” he said. “They have gone through this before, to analyze and review proposals and make a decision as to whether additional licenses should be issued.” […]
Asked about protecting the state’s bottom line – revenue from the casinos funds a variety of state programs, Branstad again deferred to the Racing and Gaming Commission. His role in the decision-making ends with his vetting of appointees to the commission, Branstad said.
“My responsibility is to appoint good people who are fair and will treat everybody in an equitable way,” he said. “That’s the way I’ve always approached it. I have never tried to influence or interfere with their decision-making process and I have confidence they will do what they feel is the appropriate thing.”