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Dipping Revenues At Riverboat Casinos Swayed Iowa Regulators Decision

Posted on May 19th, 2010

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Jack Ketterer, an official of the Iowa Racing and Gaming Commission has presented before the members of the commission a chart displaying the falling revenues of the state’s riverboat casinos. The chart that illustrated how revenues at six of the state’s seven riverboat casinos significantly dropped played a vital role in the commission members’ unanimous decision to grant approval only to the Lyon County casino project, rejecting the other three applications for state gambling licenses.

Overall, revenues at Iowa casinos have climbed in previous years, but, Ketterer said, the increase has nothing to do with the floating casinos moored on docks. Rather, it was as a result of the opening of four new land-based casinos in the past years, development projects at three race track casinos and the transfer of riverboats to land locations in Burlington, Dubuque and Clinton.

Total casino revenue in Iowa for fiscal year ending last June 30 was $1.4 billion. Of the seven riverboat casinos that remained, the Lady Luck Marquette reported the biggest drop in revenues at 31.1 percent or $42.1 million in fiscal year 2006 down to $29 million projected for this fiscal year ending June 30. Terribles’ Lakeside Casino found at West Lake in Osceola saw a decline of 18.8 percent or $59.6 million in fiscal year 2007 plunging to $48.4 million projected for fiscal year ending June 30.

Only Argosy Sioux City on the Missouri River maintained its $57.8 million in casino revenue with no change at all for the past four years. Ketterer said it is because Argosy has a large market base and no new casino opened near it in the past four years.

Ketterer said he made the chart precisely as a proof to show those who have been actively campaigning for the further expansion of the gambling industry in Iowa that there are already more than enough casinos in Iowa and that the state’s gambling markets are too full for any more revenue growth. The five members of the commission all agreed to reject requests for new casino license for Fort Dodge, Ottumwa and Tama County and approve only the application for Lyon County.

A casino in Lyon County would draw gamblers from Iowa’s neighbouring states, South Dakota and southwest Minnesota, and roughly 80 percent of its customers are expected to come from out of state. Commissioner Kate Cutler of Council Bluffs said the situation is raising real economic concerns, as the numbers in the chart have shown that the state has clearly reached a saturation point.

The casino project at Fort Dodge would have been a $56 million casino complex at the interchange of U.S. Highways 20 and 169. The plan was for a hotel with 600 rooms, a convention center with a seating capacity of 500 and a multi-purpose arena. The project, which would have created up to 350 jobs was opposed by community officials in Emmetsburg who saw its possible impact on the Wild Rose Casino in Emmetsburg. In Ottumwa, the Rippling Waters Casino would have been a $55 million casino hotel with 100 rooms and two restaurants and would have given rise to 367 jobs.

It would have been situated next to the city’s $21 million Bridge View Events Center. The gambling regulators had reservations about the developer of the facility, Ingenus Management and Consulting of Brainerd, Minn., having the ability to raise enough financing for the project.

The Tama County project, the $45 million Prairie Hills Resort, Hotel and Casino would have been located along the new U.S. Highway 30 bypass under construction. The planned 90-room hotel, a 500-seat convention center, a restaurant, an ATV park and an outdoor ampitheater would have hired 300-400 new employees. The project was opposed by the Meskwaki Indian tribe, operator of a large casino west of Tama. The tribe claimed that Tama County had no more room for another casino, amid protests from supporters of the casino project.

Gov. Chet Culver had pushed for the approval of all four casino projects stressing the fact that voters in each of the four counties had passed ballot proposals allowing casino gambling. He asked regulators not to let go of occasions that could help ease unemployment.Members of the panel have agreed not to grant any new casino license for a period of three to five years.