So we were served our annual cocktail of Iowa gambling revenue numbers this week, for the fiscal year just ended.
But is our $1.45 billion glass half-full or half-empty?
The half-empty crowd no doubt will point to the largely flat, 1 percent growth in overall adjusted gross revenues. Only seven of the state’s 19 casinos made more money this year than last year.
Imbibers of optimism may look instead at two new land-based casinos in the Quad Cities replacing old riverboat venues. They saw a sizable revenue jump. An infusion of new blood jolted a stagnant market. Capitalism, 101.
Two groups of optimists will be pitching rival downtown Cedar Rapids casino projects to the Iowa Racing and Gaming Commission this very morning. The Cedar Rapids Development Group will once again present its Cedar Crossing by the River concept, which failed to win approval in 2014, along with a smaller $105 million Cedar River Central casino adjacent to the U.S. Cellular Center, DoubleTree Hotel and Cedar Rapids Convention Complex.
Wild Rose Entertainment will pitch a stripped-down $40 million “boutique” casino for a site across First Avenue from the cellular center, etc.
No doubt they’ll contend a shot of new casino competition would help Cedar Rapids, could help Iowa’s gambling industry and wouldn’t do much harm to existing casinos.
Trouble is, the commission is packed with glass half-emptiers. Based on their track record, it’s a good bet they’ll regard the revenue numbers as more evidence Iowa’s market is saturated and in stable condition. Member facilities of the cartel need protection, not a jolt of new blood.
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Chances are, the two consulting firms they hired to study the market, and potential cannibalization wrought by a Cedar Rapids facility, will see it in a similar way. Marquette Advisors, who studied the market in 2014 and has been hired to do a 2017 study, predicted revenue growth similar to what we saw this week and insisted Iowa can’t bear more gambling.
So our Cedar Rapids casino contestants are paddling upstream. Unlike past years, when applicants pulled out all the stops on their presentations, today, modesty might be the best policy.
They’ll have the difficult task of arguing their plans are for good, high-quality gambling venues, but not so good that Riverside, Waterloo, etc. will see their customer bases vaporized.
Each plan has its selling points. Cedar Crossing Central would be Iowa’s first casino built above tracks for a train. Cedar Crossing (Classic) on the River would include flood protection in case of heavy rain. Wild Rose already has three Iowa casinos, and its chairman, Gary Kirke, might lend you his plane.
OK, I’ll stop.
Maybe you’re thinking some new competition would attract new customers and push existing casinos to step up their own games. Gamblers apparently want new, as the Quad Cities numbers indicate. More than 60 percent of Linn County voters wanted new when they voted for gambling in 2013.
Sober up. You’d make a lousy caretaker of a casino cartel protected by and profiting from the status quo.
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