Draw casino saturation lines

There have been nearly daily letters to the editor crying foul since the Cedar Rapids casino license was rejected.

The Gazette's May 6 front page featured Mayor Ron Corbett questioning the donations made by the Riverside Casino owner to the USS Iowa Battleship fundraising campaign chaired by Jeff Lamberti, who is also the Iowa Racing and Gaming Commission chairman.

According to The Gazette's May 9 editorial, the donation dialogue is escalating to suggest policing casino owner donations to any cause involving gaming commission members and suggesting a state investigation of the Riverside casino owner's donation to the USS Iowa fund. Lots of dialogue with no solutions.

Donations had nothing to do with the Cedar Rapids casino license rejection. Potential casino saturation, state control of gaming and maximizing state casino tax revenue had everything to do with it.

Casino saturation throughout the United States has been well documented by Time magazine and other national publications for the last several years. State, county and local governments long have believed opportunistic casino tax revenue is the panacea for general fund shortfalls. Far too many jurisdictions and their stakeholders have experienced the harsh realities of lost jobs and loss of general fund revenue created by casino closures because of casino saturation.

In the blinding light of hindsight, it is crystal clear that additional customers do not simply materialize out of thin air in any casino market. Casino customer counts are declining in most markets. The saturation lessons learned throughout the United States should not be lost in Iowa.

The Cedar Rapids Development Group, consisting of hundreds of well-intentioned local investors, waged the best possible campaign to gain approval for the license. Regrettably, it was a long, costly run for a very short slide.

It appears the commission was established by the Legislature with the trifold mission of avoiding casino saturation, maintaining state control of gaming and maximizing state casino tax revenue. The commission's rejection of the Cedar Rapid's casino license fulfilled its mission. That said, it is incumbent on the commission to ensure other well-intentioned Iowa investor groups do not spend millions of dollars on a stacked-decked casino application.

The Iowa Legislature has determined that this state will not be a free-market, Las Vegas-style gaming state. With this in mind, early adapter casino owners invested and continue to invest millions of dollars in their casino operations. Under the state's controlled gaming business model, these early adapter casino investments must be protected.

The commission clearly has created written or unwritten casino saturation parameters. The parameters were used to reject the Cedar Rapids casino application to protect the early adapter casino investments in Riverside, Waterloo and Dubuque. Given the commission's parameters, should the Legislature direct the commission to establish clearly defined, statewide casino districts based on their saturation parameters?

Creating such districts should be a simple mandated commission initiative. Divide the state into casino districts using the existing 18 casinos and the commission's saturation parameters as the foundation. Plot the existing 18 casinos on an Iowa map, draw established saturation parameter boundaries around the existing casinos, establish a legislative moratorium on any new casino license applications within the saturation district boundaries, and allow new casino license applications that do not violate any existing such boundaries.

Finally, publish the casino map for complete transparency of available casino licenses for private investor consideration and commission approval.

Well-intentioned investor groups, such as the Cedar Rapids group, never would have invested millions in an initiative had the saturation parameters been transparent.

' Dick Olson of Hiawatha is a business owner, long-term city council member and founding board member of the Hiawatha Economic Development Corporation, as well as a supporter of the Cedar Rapids casino project. Comments: dickolson@psc.nu