The Iowa Racing and Gaming Commission recently presented the results of two studies, both indicating a casino in Cedar Rapids, Linn County, would cannibalize revenue from existing, nearby casinos.
A study by the Innovation Group showed existing casinos would lose 30 percent of their revenue, or $61 million total, to a new Cedar Rapids casino.
However, the new casino would generate $51 million in new revenue for the state.
Cedar Rapids Mayor Tiffany O’Donnell said, “I’m very encouraged. The effects will be minimal, and certainly the effects on existing casinos less than they’ve ever been before. If not a casino in Cedar Rapids now, I’m not sure when it would be.”
However, Elite Casino Resorts Chief Executive Officer Dan Kehl was not “encouraged” by the reports.
“It’s like déjà vu all over again,” he said. “The commission has studied this issue diligently. But the fact is, a Cedar Rapids casino comes primarily at the expense of Riverside, Waterloo and Meskwaki. We’ve invested heavily in our properties to make them attractive to our guests.” Elite operates casinos in Davenport and Riverside; consultants said the casinos in Riverside and the Isle Casino in Waterloo would be most affected by a Cedar Rapids casino.
Kehl said Iowa’s gambling industry needs to help existing casinos, especially those along the state borders, to compete with outside competition.
Cedar Rapids City Manager Jeff Pomerantz said, “Let’s bring in the competition. We’re ready for it in Cedar Rapids. We want to benefit the state, we want to benefit the community. I think the competitive forces are critical when others are trying to take our businesses into other states.”
Last November, 55 percent of Linn County voters approved a casino referendum. But three of the five IRGC commissioners must approve a new casino license. The commission denied Cedar Rapids a casino license in 2014 and 2017 over concerns it would cannibalize existing casinos.
The IRGC also commissioned Spectrum Gaming Group to conduct a socioeconomic study regarding casinos. It indicated some types of crimes do increase in casino communities, but generally those communities are not less safe.
Spectrum Gaming Group Managing Director Michael Pollock said, “Crime is a universal concern, a universal question in every gaming market. And the reality is—we’ve been studying this for 40 years—casinos do not create street crime, do not do anything along those lines.”
However, he noted robberies, thefts and other non-violent crimes, are higher in casino-host communities, because more people with more money present more opportunities for criminals.
“There’s going to always be some relationship, but it’s really a function of the number of people and the amount of money and the number of visitors. It doesn’t make a community unsafe,” Pollock said.
He noted other positive factors offset the impact. “When you add employment, and you add capital investment, quite the opposite is true. The community becomes safer. When you say the crime rate increases, people think that makes that community less safe and it’s not the case,” he said.
The history of an area pre-casino also makes a difference.
Pollock said, “The communities that seek to have a casino as an economic stimulus and very much want that economic stimulus, often have a lot of problems to begin with that they don’t have the resources to address. So, those problems may have been there, to begin with. That is essential to understanding what these numbers mean.”
A lot of variables also affect the rise in problem gambling associated with casinos, Pollock said. He noted Iowa’s problem gambling rate is very low and the state ranks fourth in problem gambling services funding.
