Iowa gambling revenue dips slightly

DES MOINES – Iowa's state-licensed racetrack and riverboat casinos saw a slight slow down in wagering in fiscal 2013 after posting record revenue the previous year, according to new state data issue Thursday.

The three racetrack casinos and 15 riverboats licensed to offer legal gambling in Iowa reported adjusted gross revenue of just over $1.444 billion for the 12-month period that ended June 30, the state Racing and Gaming Commission said. That was down nearly $21.76 million, or about 1.5 percent, from the casinos' best-ever financial take of nearly $1.466 billion in fiscal 2012.

“I think things have leveled out a little bit,” said commission administrator Brian Ohorilko. “We ended up pretty close to where we were last year.”

Wes Ehrecke, president of the Iowa Gaming Association, which represents 18 commercial casinos licensed by the state to operate in Iowa, said gaming operations in Iowa were affected by inclement weather, video lottery terminals operating in Illinois and other competition, and continued economic factors that impact people's discretionary spending.

“You factor all those together, I think we're still pretty marketable in offering a premiere entertainment destination,” said Ehrecke, who credited the gaming industry with creating $1 billion worth of economic activity in Iowa via wages, benefits and taxes paid, in-state supply purchases and other factors. “It's fairly stable,” he said compared to other parts of the country that have seen significant drops in gambling revenue.

In the commission's fiscal 2013 report, 11 of Iowa's 15 riverboats posted lower adjusted gross revenues compared to the previous year, while four boats reported gains. Prairie Meadows was the only state-licensed racetrack casino with a revenue gain, while dog tracks in Council Bluffs and Dubuque had declines.

“I think it's an indication of softness in the industry as a whole,” said commission chairman Jeff Lamberti of Ankeny.

“It's a pretty soft economy still and gambling tends to be people's discretionary entertainment spending, and so a lot of entertainment-type things are down a little bit as well. That's what we've been hearing through the industry, that it was a little soft. Not terrible, but soft,” Lamberti noted.

“There still are good things happening,” he added. “Moving forward, I think everybody would love to see the economy pick up the pace a little bit, but I don't think it's anything that's giving us any real concern. I think it's just that softness in the economy.”

On the attendance side, admissions were up slightly at the three tracks with 6,138,393 customers through the turnstiles, while the riverboats saw a slide of 968,233 visitors from the 16,690,125 admits in fiscal 2012 and the record 16,991,583 admissions in fiscal 2008. The fiscal 2013 per-capita spending was $63 at the boats and $74 at the tracks – data that compared to $31 in average per capital spending in fiscal 1998 when the tracks saw a record 8,405,827 admissions.

The Iowa Racing and Gaming Commission is seeking proposals for a study on the socio-economic impact of gambling in Iowa in anticipation of a new round of applications for state gaming licenses. Lamberti expected the fiscal 2013 revenue report would factor into the commission's future decisions.

“I'm sure they will look at where the overall market is right now,” the commission chairman said.

“It could have some impact in terms of where is a new facility going to get its customers from and does it have an impact because the market's down just a little bit. I suspect it could. I don't think it probably will be a huge factor relative to the overall question of where are these people going to come from, but it could certainly have some impact,” he added.

Cedar Rapids Mayor Ron Corbett didn't think this week's state report would have much bearing on his community's quest to land a state gambling license for a proposed riverboat.

“I don't see it as a major factor. I don't know why they are down. Revenues fluctuate up and down. Tax revenues fluctuate up and down,” he said. “It might indicate that it's time for more competition. Just like we lost business at our convention center because we didn't keep it up and invest in it, you can't just build a casino and expect people to keep coming if you don't keep it fresh.”

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