Fresh competition helps keep Iowa’s casino market strong says a former casino executive in the state, Jonathan Swain, who is trying to sell the idea of a new casino, Cedar Crossing Casino, in Cedar Rapids.
Swain is part of a management and development team for the project that Peninsula Gaming LLC proposes. He recently pointed to his own recent experience as CEO of the Diamond Jo Dubuque, and its constant competition with the Mystique casino.
As the two Dubuque casinos jockeyed for position and added new gaming positions and employees, it actually caused the gaming market to grow in that city, he points out. During the period between 2005-2012 the revenue generated by that market grow from $96.5 million to $129 million.
According to the Gazette, whose editorial board met with Swain, and two other Peninsula executives, Swain posed the question of why that happened, and answered his own query: “What happens when a new competitor enters the market is that we react as business people. We do things. We invest. We reacted to the new marketplace.”
Swain addressed complaints by Dan Kehl, chief executive officer of the Riverside Casino and Golf Resort, who has been strong in his criticism of Peninsula’s proposal. He cites reports that a casino in Cedar Rapids would take as much as 42 percent of his market.
Swain says that such reports always overestimate how much “cannibalization” will happen when new casinos are built. “Instead, there was growth in the market,” Swain said of past casino growth. “Existing casinos did things to improve themselves. The amount of cannibalization is limited and it occurs only to those competitors who don’t react to new market conditions. And that’s just not the way business people react.”
Swain suggested that Kehl, “ratchet down the rhetoric.”
He added, “It is true that Dan and his shareholders will be less successful in Riverside than they have been in the past because their success has been based on a monopoly for the casino’s first eight years. But the decline in success should not come at the cost of the benefit a casino can bring to Cedar Rapids and to the state of Iowa.”
