A new study by Las Vegas-based Gaming Market Advisors indicated a proposed 0 million casino in Cedar Rapids, Iowa would reduce annual gaming revenue at the Isle Casino Hotel in Waterloo by .3 million, or 10.8 percent.
Commissioned by Isle of Capri Casinos, the study shows similar results as three out of four recent market studies. Bari Richter, vice president and general manager of the Isle Casino, said, “We’ve got five studies. Four of them look alike.”
The Iowa Racing and Gaming Commission hired Marquette Advisors of Minneapolis and Union Gaming Analytics of Las Vegas to examine the effect a Cedar Rapids casino would have on other gaming operations. The Union Gaming Analytics forecast showed a $9.3 million drop, or about 11 percent, in the Isle Casino’s revenue. The Marquette study indicated a decrease of $10 million in revenue. In January, a study by New Orleans-based Innovation Group, commissioned by Riverside Casino & Golf Resort, estimated a Cedar Rapids casino would cut revenue in Waterloo by about $11 million annually.
TMG Consulting of New Orleans conducted the only study that showed a much smaller effect by a Cedar Rapids casino, located an hour southeast of the Isle Casino Waterloo. That report, commissioned by Cedar Rapids Development, the investor group behind the casino, showed a 4.7 percent decline, or $4 million per year, due to the Cedar Rapids property.
The studies also have indicated revenue would drop at the Riverside Casino and Golf Resort in Riverside, ranging from a 27.4 percent decline (Marquette) to 42.1 percent (Union Gaming).
The IRGC board will announce its decision regarding issuing a gaming license to Cedar Rapids Development at its April 17 meeting in Council Bluffs. The commission has not approved a new casino license since 2010, when it called for a three- to five-year moratorium due to concerns about market saturation .Tim Hurley, former Waterloo mayor and chairman of the Black Hawk County Gaming Association, which opposes the Cedar Rapids project, said, “This shows the entire market is saturated.” The BHCGA holds the gaming license to the Waterloo Isle casino, which receives 5.75 percent of the casino’s gross receipts to distribute in grants to nonprofit and public projects. Hurley said less casino revenue could result in a loss of up to $1 million per year. Since the Waterloo casino opened more than five years ago, the BHCGA has distributed $30 million in grants.
Hurley said he hoped the IRGC will consider how the Cedar Rapids casino would cannibalize existing markets. However, a report prepared by Jack Ketterer, the former IRGC administrator, and commissioned by Riverside Casino and Golf Resort, showed the commission historically has considered cannibalization when reviewing gaming license applications.
Ketterer’s report indicated over the past 20 years, the IRGC has received 20 applications for casino licenses and denied 13 of those. The report said, “Not only economic factors were involved. Many Iowans simply felt the status quo was enough and let the commission know it through phone calls, emails, letters and in their comments at public meetings.”
Riverside consultant Jeff Link said Ketterer is highly regarded in the Iowa casino industry and the commission is likely to reject Cedar Rapids’ application if it follows past precedent.
But Cedar Rapids attorney and former IRGC Chairman Greg Seyfer said, “The Ketterer study is an interesting history of gaming licenses in Iowa. After careful review it shows why this commission should approve the proposed license for Cedar Rapids. Limited competition has in the past and will in the future result in increased investment that will benefit communities and the State of Iowa.”
Cedar Rapids Development Group Chairman Steve Gray added, “Surrounding market impact has been predicted in every study for the past 10 years and in most cases never occurred.” Gray also noted in Dubuque, two gaming facilities have been operating in close proximity for decades, and that more than 61 percent of voters in Linn County, which includes Cedar Rapids, supported the proposed casino during an election last year.
On April 3, Gray and Cedar Rapids Mayor Ron Corbett led four of five IRGC commissioners on a bus tour to view the downtown site for the proposed Cedar Crossing Casino. Following the tour, the commissioners held a public hearing attended by more than 500 people, mostly casino supporters. Numerous speakers told commissioners that the casino would kick off redevelopment in a downtown neighborhood that was significantly damaged in the 2008 flood; that it would create hundreds of jobs and generate millions of dollars in new tax revenue for the state; and that local nonprofit groups would receive much-needed funding.
Critics of the project, representing casinos in Riverside, Dubuque, Tama and Waterloo, also attended the hearing. Dan Kehl, chief executive officer at Riverside, told commissioners he would have to lay off 250 or his 750 works if they approve the Cedar Rapids casino. He played a video featuring Riverside employees who said their families would be devastated if they lost their jobs.
Also in Iowa, Hard Rock Hotel & Casino Sioux City General Manager Todd Moyer said when the $128.5 million property is completed, visitors will view rock memorabilia from legendary musical artists including Sioux City’s own Tommy Bolan. The displays will be rotated regularly, Moyer said. In addition, live acts from all genres will perform at the 800-seat Anthem theatre.
The property is incorporating the Battery Building, a Romanesque revival-style brick warehouse, built in 1906, listed on the National Register of Historic Places. The Battery will be connected to a new 58,000 square foot building that will house the 30,000 square foot casino floor, featuring 850 slot machines and 20-plus table games, along with a center bar.
The 100,000 square foot gaming and entertainment destination is projected to attract an estimated 1 million visitors per year, and generate more than $90 million in annual revenue.
