Riverside, Cedar Rapids casino investors differ on gambling revenue figures
Commission study on gaming market in Iowa to begin soon
Not surprisingly, the Riverside Casino and Golf Resort south of Iowa City and the casino investor group in Cedar Rapids arenít seeing eye to eye.
End-of-the-fiscal year figures from the Iowa Racing and Gaming Commission showed on Thursday that adjusted gross revenue after payouts in Iowa at casinos and racetracks dropped 1.48 percent to $1.444 billion from the year before.
R.G. Schwarm, a representative for casino investor group Cedar Rapids Development Group LLC, shrugged off the decline in gaming revenue in the state on Thursday, saying that a 1.5 percent increase or decrease in any given year didnít matter and he said it will not affect the Iowa Racing & Gaming Commissionís decision about the proposed Cedar Rapids casino in any way.
"The numbers are going to fluctuate from year to year," Schwarm said.
He noted the commissionís end-of-fiscal-year figures a year ago showed an increase ó of 6.3 percent in adjusted gross revenue at Iowaís 15 casinos and three casino-racetracks†ó which he said reflected the addition of the stateís newest casino, the Grand Falls Casino Resort in Larchwood in the stateís northwest corner.
The latest state figures show that revenue from the stateís casinos is up 4.7 percent over figures released two years ago.
Meanwhile on Thursday, Dan Kehl, chief executive officer of the Riverside Casino and Golf Resort, said the state commission revenue figures mirrored what he said he has been saying for months.
"Revenues have been flat if not down a little bit," he said. "The economy is tough. Ö For the majority of Iowans, they donít have a lot of free cash to be spending. Ö I think there are a lot of people just nervous."
Thursdayís figures showed adjusted gross revenue declined at the Riverside venue by 1.85 percent in the last year, though revenues there remain 1.5 higher than two years ago.
In Waterloo, where the Isle Casino and Hotel Waterloo has worried about losing revenue to a Cedar Rapids casino, revenue was up 3 percent in the last year.
Nothing in his mind, Kehl said, has changed related to the proposed Cedar Rapids casino. It will take 30 percent of the Riverside casinoís business if it succeeds in securing a license from the state commission, he said.
Kehl noted that the commission is embarking on a brand-new market study or studies of the state of casino gaming in Iowa, and he said that study will reveal that a Cedar Rapids casino, if permitted, will damage the Riverside casino and others in Eastern Iowa.
Commission members will be looking at two key questions as they decide early next year if they will grant the Cedar Rapids casino group a license to operate: Will the new casino increase state gaming revenue? And can it do so without damaging other casinos?
Kehl said the state is apt to see an initial spurt in overall statewide casino revenue if a Cedar Rapids casino opens because of the newness of the casino and because of the business that a Cedar Rapids casino will grab from the casino on the Meskwaki Indian Settlement west of Tama. The stateís two active Indian casinos operate without state licenses and their revenue figures are not counted in the stateís figures.
"There will be slight uptick (in revenue) on a statewide level, but not enough to offset the damage that will be done to the other facilities," Kehl said.
Kehl is one of the owners of the stateís newest casino in Larchwood, where revenue in the last year went up 1.36 percent while it was declining 1.48 percent statewide.
Kehl and his group of investors also has been selected by the Riverboat Gaming Authority in Davenport to build, own and operate a new casino in Davenport, where the existing riverboat will close in favor of a new land-based casino.
Kehl and Steve Gray, who is heading up the Cedar Rapids casino investor group, were fixtures on television campaign ads in the month or so leading up the March 5 vote to allow casino gambling in Linn County. Voters approved the measure, which Kehl campaigned against to protect his Riverside casino.
Gray, who has said a Cedar Rapids casino will not significantly harm the Riverside casino, was traveling on Thursday and not available for comment.
The Cedar Rapids investors and the city of Cedar Rapids are in the process of negotiating a development agreement which will include the sale to the investors of about seven acres of vacant city property directly across the Cedar River from downtown. The investors want to built their $100-million casino there.
Gray said the investors will submit their application for a state gaming license by the commissionís Sept. 3 deadline.Kehlís father, Robert, who was a pioneer in the stateís riverboat casino industry, died July 3 at home in Dubuque.