Revised Cedar Rapids casino pitch includes Zach Johnson-branded restaurant, STEM lab

• A market study by Convergence Strategy Group suggests a Cedar Rapids casino could increase Iowa's net gaming revenues by more than $80 million annually.
• The study also suggests that a Cedar Rapids casino could "cannibalize" Iowa's gaming market, but would be minimal and outweighed by the overall gaming revenue benefit.
• P2E and the Linn County Gaming Association unveiled plans for Cedar Crossing Casino and Entertainment Center, a proposed $275 million development.
• The Iowa Racing and Gaming Commission is set to decide the fate of a Cedar Rapids gaming license Feb. 6, 2025.

CEDAR RAPIDS — Supporters of a Cedar Rapids casino say significant changes have occurred in Iowa’s gaming industry since their last application in 2017, including population growth and increased gaming revenues.

Casino backers on Monday unveiled their own market study that suggests a Linn County casino would increase Iowa’s net gaming revenues by more than $80 million.

The July study conducted by Convergence Strategy Group — a consulting firm in the casino gaming and leisure industries — anticipates a Cedar Rapids casino would draw 1.1 million visitors annually, contribute an estimated $80.2 million of new taxable revenue for the state of Iowa and divert $27.8 million in projected adjusted gross revenue from other commercial casinos in Iowa. That is an increase from a 2021 market study that showed a Cedar Rapids casino would create new taxable revenues of $51 million.

While the study again raises the possibility a casino would “cannibalize” Iowa’s gaming market, that could be outweighed by benefit to overall gaming revenue, supporters said. It predicts Riverside Casino will see an 11.6 percent hit on projected revenues, while Isle Waterloo and Dubuque casinos would see 5.8 percent and 3.6 percent reductions, respectively.

The forecasts are derived from an analysis of anonymized aggregated cellphone data that tracks ZIP codes of visitors to each casino property in the region.

Suzanne Leckert, co-founder of Convergence Strategy Group, said previous studies overestimated the impact of a Cedar Rapids casino on existing casinos, as they were limited by the data available. Leckert asserts utilizing historical and current cellphone tracking provides more accurate data.

“Before, models were calibrated to visitation and revenue counts the state reports every month for every casino in the market. Now, we have locations of where those people are coming form and more accurately understand market dynamics and a facility’s penetration of an area,” she said.

Peninsula Pacific Entertainment (P2E), a national gaming operator and developer, and the Linn County Gaming Association unveiled plans Monday for Cedar Crossing Casino and Entertainment Center.

The proposed $275 million development would built on the former Cooper’s Mill site, on Cedar Rapids’ northwest side, and feature a casino with 700 slot machines and 22 table games, plus a group of restaurants, bars, entertainment venues, an arts & cultural center and a STEM lab “that will drive visitation from a diverse clientele.”

Racing and gaming commission market study due in December

Last month, P2E and the Linn County Gaming Association jointly submitted their gaming license application to the Iowa Racing and Gaming Commission, and together will present their application at the Oct. 3 IRGC meeting in Bettendorf.

The five-member panel is slated to decide the fate of a Cedar Rapids gaming license Feb. 6, 2025. The Iowa Racing and Gaming Commission selected Innovation Group and Marquette to conduct a separate market study assessing how a Linn County casino would affect Iowa’s gaming industry and nearby gambling facilities. That study is due at the end of December.

Leckert and P2E executive Jonathan Swain said many changes have occurred since its last application to the Racing and Gaming Commission in 2017, including significant growth in Linn and Johnson County populations. The gaming industry, as well, has seen a boost in revenue, reaching over $2 billion in 2023 from $1.5 billion in 2017.

“As a result, the Iowa operators, many of them opposed to this project,” are profiting from record revenues, Swain said.

  Buy Photo

Iowa also has seen growing competition from neighboring states. A Cedar Rapids casino, Swain said, could help Iowa offset gaming industry losses as Illinois and Nebraska expand gambling.

In 2022, the Linn County commission released market studies from Spectrum Gaming Group and Innovation Group showing Nebraska’s gaming facility growth along Iowa’s western border would eat into industry revenue in Iowa.

Leckert, too, argued that previous cannibalization projections from state-commissioned studies have never materialized. She pointed to projections from a 2011 IRGC-commissioned study that projected Elite Casino Resorts’ Grand Falls Casino & Golf Resort near the Iowa-South Dakota border would siphon $20 million, or 27 percent, of Grand Falls revenue, from other casinos. However, revenues increased for surrounding casinos. Additionally, a 2014 IRGC-commission study projected Wild Rose Casino & Resort in Jefferson would derive 78 percent of its business from cannibalizing other casinos. Instead, Prairie Meadow in Des Moines, a primary competitor, experienced an initial downturn for one year, then revenue rebounded and increased over the next two years.

“Our projections, we believe, are reasonable and reliable,” Leckert said.

Swain added gaming revenue at Riverside was $129 million last year, up from $85 million in 2017.

“So considerably more profitable,” he said.

Mayor: Casino would revitalize the area

Cedar Rapids Mayor Tiffany O’Donnell said the proposal will deliver on a promise to voters who overwhelmingly said that they wanted the same opportunity others in Iowa have been granted to create a vibrant destination, ensuring Cedar Rapids will thrive as a hub for entertainment, culture and community engagement.

  Buy Photo

In 2013 and 2021, Linn County voters passed public referendums authorizing gaming in the county. The 2021 vote permanently authorizes gaming in the county.

  Buy Photo

O’Donnell and other supporters said the casino will spur additional capital investments, revitalizing the area with new businesses, retail shops, restaurants and entertainment venues. The project also includes flood control measures and is projected to create more than 1,000 construction jobs and 524 full-time positions.

P2E and the Linn County Gaming Association have previously committed to distributing 8 percent of net adjusted gross revenue to nonprofit organizations, or about $6.3 million annually — more than twice the state-mandated minimum.

  Buy Photo

O'Donnell also highlighted the project's backing by more than 60 local investors, including small business owners, community leaders and nonprofits.

“Cedar Crossing will be a compelling reason to stay and build lives and futures here for the northwest side of the Cedar River, it will serve as an anchor for much needed redevelopment, leading life into an area that has long awaited its renaissance,” O’Donnell said.

Kirsten Running-Marquardt, chair of the Linn County Board of Supervisors, emphasized the project's importance for long-term growth and prosperity.

State Rep. Bobby Kaufmann, R-Wilton, has told news outlets he plans to introduce a moratorium that would block new gaming licenses when lawmakers convene again in January.

“We are only looking for a fair chance, a fair shot from the Racing and Gaming Commission, from the Legislature and from the governor,” Running-Marquardt said. “We want this fair chance and the same rules that other communities have had to abide by. … We want a fair shot, and if we get one, we can make this opportunity a reality for our community.”

  Buy Photo

Zach Johnson restaurant among proposed amenities

Cedar Rapids/Iowa City Building Trades Council President Mike Sadler discussed the project's potential to create more than 900 local building trades jobs on site and more than 800 indirect jobs throughout the corridor and the state, for a total of 1,700 jobs.

Economic boost: Supporters estimate a Cedar Rapids casino will generate $66 million in spending annually in the state, supporting 524 full-time jobs. They project Iowa would receive $1.9 million in sales taxes, $1.1 million in income tax revenues and more than $21 million in state gaming taxes annually. The City of Cedar Rapids and Linn County are projected to receive $2.3 million and $502,000, respectively, annually in gaming revenue. Additionally, Linn County is expected to gain $322,000 in sales taxes each year.

STEM lab and community engagement: Casino backers played a prerecorded video of Camille Schrier, Miss America 2020, discussing the STEM lab at Cedar Crossing, which will provide hands-on learning for Cedar Rapids youth.

The STEM lab will be free to all students in Linn County and will feature rotating exhibits of STEM technology. The project also includes a dedicated Arts and Cultural Center, which will host world-class exhibitions and serve as an educational resource for local students, in partnership with the National Geographic Society, Swain said.

He said the STEM lab and rotating museum exhibit space with have a separate entrance from the casino.

“We look at as a separate amenity from the gaming facility,” Swain said.

Restaurants: The proposed casino would feature a mix of restaurants. the restaurants include:

The facility also will feature a 1,500-capacity entertainment venue that will host concerts, sporting events, comedy shows, special events, festivals and trade shows.

The project aims to enhance the overall experience for visitors and support other businesses in the community, backers said.

Swain said the casino will have a point partnership program, “where if you earn your rewards credits (at the casino) you can go to any business in Cedar Rapids that signs up for our partnership, and you could participate, just as our restaurants do.”

“So our goal, again, is to try to raise all levels of business for everyone,” Swain said.

Comments: (319) 398-8499; tom.barton@thegazette.com