Gaming commission grants casino license to Greene County (updated)

The Iowa Racing and Gaming Commission voted 3-2 today to grant a casino license for a $40 million project near Jefferson (Greene County) in western Iowa, between Boone and Carroll counties. Residents had overwhelmingly approved a gambling referendum last year, but the outcome was in doubt because the commission recently voted down a casino proposal for Cedar Rapids. According to Dar Danielson's report for Radio Iowa, the commissioners who opposed the license cited evidence a new casino would largely take business from existing Iowa casinos, and that the Greene County community didn't need a gambling facility as much as other amenities. The commissioners who favored the license cited the potential economic impact for a rural area.

The Prairie Meadows Racetrack and Casino in Polk County had lobbied the commission to reject Greene County's application, citing potential impact on its business. Jefferson is a little more than an hour's drive northwest of the Des Moines metro area. But in casting the decisive yes vote, Racing and Gaming Commission Chair Jeff Lamberti noted,

We have lots of advantages in Polk County and I think we have lots of advantages that are going to come in the future," Lamberti explained. "We've got significant population growth amongst all of our suburbs. We've got some good things that are in the work that are pretty historic by Iowa standards. And quite frankly, we have advantages that a lot of other parts of the state don't have, and quite frankly I think we are going to be just fine."

Cedar Rapids Mayor Ron Corbett, who has vowed to keep working toward a casino for his city, sounds furious about today's decision. I've posted some of his comments below.  

From Jason Clayworth's Des Moines Register story on June 12:

"In the environment that the racing and gaming commission was stout about their comments about saturation, about cannibalism, about concern about individual operators. Those were some of the themes in why they said no to Iowa's second largest city," Corbett said. Nothing has changed in the last month and half but for some reason they said yes to Greene County."

Corbett continued: "They can't say, 'Well, it isn't saturated anymore.' It appears they used their own studies about saturation and cannibalism and quoted those studies against us but they don't seem to matter in the Greene County approval."

Corbett speculated that the one major difference is the ownership. Gary Kirke already runs other Iowa casinos. That may have played some influence, Corbett said.

Corbett said Cedar Rapids officials have not given up. Among the possibilities is resubmitting their application as a smoke-free casino, which would be Iowa's first. Cedar Rapids casino advocates have also discussed possibly asking the legislature to step in, to help shift Iowa's gaming atmosphere to "a more competitive model versus a cartel that's protected from the Racing and Gaming Commission," Corbett said.

In April, Lamberti warned against assuming the commission would view Greene County's application the same way as the Cedar Rapids project.

Commission chair, Jeff Lamberti of Ankeny, says it's a whole new situation when they look at a request for a gambling license for Greene County in June. "I think we're not necessarily looking at an apples-to-apples comparison," Lamberti says. "Obviously here in Linn County we were looking at a very significant impact on two or three markets."

Lamberti says they will look at the proposal to build a Greene County casino near Jefferson based on its impact in that area. "So I think what we're going to do as a commission is start the process that we did in Linn County and go back and look at them on an individual basis, and look at the individual facts," Lamberti says.

The commission members talked about what they see as the gambling market reaching a saturation point in making their decision on the Cedar Rapids license. Lamberti says he expects the body will send a message about any future expansion following the Greene County discussion.  "When we get to the Greene County decision, I think I would expect the commission - based upon the ruling there - to then give an indication to the rest of the state what we think is out there, and if we are going to be willing to consider further applications," Lamberti says.

UPDATE: Todd Dorman has more on the studies that informed the commission's decisions.

A market study by Marquette Advisors found that 79 percent of Greene County's estimated $28 million in annual revenue would come from existing casinos, or about $22 million. The same study estimated that Cedar Rapids would get 73 percent of its revenue from cannibalization, or $59 million. So Cedar Rapids' take from the casino cartel is more than two and a half times as large as Greene County's.

And Greene County's casino would take smaller bites from several casinos, $6 million from Prairie Meadows, $4.5 million from Meskwaki and $3.2 million from Wild Rose Emmetsburg, with lesser amounts from several others. Wild Rose will own the Greene County facility, so in that case, it's friendly cannibalization.

So Greene County's impact would be smaller, and it would be spread around.

Cedar Rapids would take one very big bite from Riverside's revenue, $25 million annually, according to Marquette, along with a $10 million chunk of Waterloo's action. So its impact would be larger and more concentrated. And, if you believe Riverside, more damaging.

Dar Danielson reported for Radio Iowa on June 16,

The gambling license awarded Greene County is likely the last opportunity for a new casino that'll be approved by the Racing and Gaming Commission anytime soon.

Commission chair Jeff Lamberti of Ankeny told those waiting for the Greene County decision last week that a definitive statement on the issue is coming. "You can fully expect that in our next meeting in July we will be making some statement about where this current commission sees the future...obviously the issue being any future expansion of gaming in Iowa," Lamberti says. [...]

Lamberti was the deciding vote for the Greene County casino, and says he went back and forth before deciding to say yes. Other commissioners said the same thing. "I think this vote clearly reflects a belief that this is a saturated market," Lamberti says.

State Senator Jack Hatch, the Democratic nominee for governor, was the guest on the latest edition of Iowa Public Television's "Iowa Press" program. He has supported Cedar Rapids' aspirations for a downtown casino, and last Thursday he indicated that as governor he would want to change the criteria by which the Racing and Gaming Commission evaluates applications for casino licenses.

Henderson: There are some areas of the state which consider casinos to be economic development. Cedar Rapids among them, very disappointed they didn't get a license from the Racing and Gaming Commission. As governor, would you sign a bill from the legislature that changes the criteria by which the commission makes that decision?

Hatch: Well, if the legislature got that involved and passed a law that would allow and recognize that certain areas of the state have better needs that were not considered under the existing law, yes, I would indeed sign that. I would also ask my Racing and Gaming commissioners to look at different criteria. Like in Cedar Rapids, they were just inundated with the largest natural disaster in the state's history, they're bouncing back, you've got some creative business people there and local elected officials that have brought that city back to a new American city. And we have an opportunity to listen to those voters to say, listen, we want to do something to continue this momentum. And it might have taken a little bit of a market share away from another gambling casino but we're not in the business of guaranteeing profits for any of these casinos. We want to make sure if it's economic development that these communities, through their thoughtful process and vote of the people, decided that they wanted a casino. We should have been more open to the unique situation of Cedar Rapids.

Borg: You're sounding like you want to go back, as Ron Corbett, the Mayor of Cedar Rapids says, the commission should ask for us to reapply and reconsider our application.

Hatch: Well, you should absolutely reapply but the criteria should be different, otherwise it's going to be the same. And having a smoke free casino is probably not going to be enough. I mean, the Governor doesn't agree with that anyway. It was just another way of deflecting the fact that he showed lack of leadership in this.

  • Casablanca

    Given Mr. Kirke's  political connections, all I can do is paraphrase capt renaud ... I'm shocked shocked that there will be gambling in Jefferson.

    Casinos are a nothing business ... They don't make anything, they don't build anything, they don't add anything, except prey on people's weakness, or in the best spin, simply carve another slice off your entertainment dollar and redistribute the resources of the unfortunate patrons.  

  • Cedar Rapids

    Cedar Rapids has plenty of stuff going on.  If they want to hurt Riverside they just need to be upfront about it.  

    • Corbett's a smart guy

      but he and other city leaders are foolish to keep chasing this dream. A casino is never the best use for prime downtown real estate anyway. Cedar Rapids could do other things with the land that would add more value.  

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