Study touts economic benefits of Iowa casinos

DES MOINES — An industry-commissioned study has found that Iowa's 18 state-licensed gaming casinos account for $2.5 billion in economic activity, support 16,798 jobs that pay nearly $742 million in wages and generate $726 million in federal, state and local tax revenues — including $321.6 million in state gaming taxes.

The 28-page report conducted by Oxford Economics for the American Gaming Association attempted to measure the gambling industry's ripple effect on Iowa's supply chain, including local businesses, and its support for a wide range of government services across the state.

'I think it really confirms that the Iowa casinos are a viable part of Iowa's economy and adding a lot of value to the state's entertainment and tourism industries,' said Wes Ehrecke of the Iowa Gaming Association. 'It has a large footprint.'

Without the gaming industry and the jobs it provides, Iowa's unemployment rate would stand at 5.9 percent instead of 4.6 percent given that Iowa commercial casinos support about one of every 91 jobs statewide.

The numbers likely would go higher next year when a state-licensed casino is slated to open in Jefferson in August 2015. The analysis did not include three casinos operated by Native American tribes in Iowa under a federal gaming compact.

'This study shows that gaming is driving big results in Iowa,' said AGA leader Geoff Freeman. 'However, given increased competition and changing consumer demands, our future success depends on strong partnerships with policymakers that allow us to innovate, reinvest and create more jobs.'

AGA officials pointed to results of a recent survey conducted by pollsters Mark Mellman and Glen Bolger that found more voters across the political spectrum view casino gaming favorably and recognize that casinos create jobs, strengthen local businesses and benefit communities.

Cedar Rapids Mayor Ron Corbett on Thursday said Iowa casinos pushed a different, more-grim story earlier this year as the Iowa Racing and Gaming Commission was considering and rejecting a proposal for a Cedar Rapids casino.

'Certainly we heard that the industry was in a delicate point and that any changes could upset the equilibrium and get all the casinos in Iowa tilted toward insolvency,' Corbett said. 'And I think this report shows that couldn't be further from the truth. The casino industry in Iowa is healthy, the casinos are doing well, and there is room for additional gaming opportunities, including in Cedar Rapids.'

Despite the rosy numbers in Thursday's report, Ehrecke said 'this year that we're in has been a challenging one' for some of Iowa's casinos that were adversely impacted by the national recession and struggled through tough winter weather and 'arctic vortexes' that held down attendance in 2014.

However, he said the establishments have continued to reinvest in their facilities by providing more amenities that hopefully will help them rebound financially.

The state Racing and Gaming Commission earlier this year turned down a license application from Cedar Rapids, citing problems associated with market saturation and potential 'cannibalization' of other existing casinos should a new facility be established in the state's second-largest city.

Whether a Cedar Rapids casino would positively impact the numbers beyond Thursday's findings would involve a 'whole different discussion' since the issues of gambling's economic impacts versus the siting of a new casino are 'apples-to-oranges comparisons,' said.

'This is what we have now,' he noted. The IGA leader said Linn County residents had an opportunity in 2003 to vote on a referendum to legalize gambling but rejected the proposal. Other communities moved ahead with gambling enterprises and invested significantly and that is what Thursday's study measured, he said.

Some lawmakers have expressed interest in changing state gambling laws during the 2015 legislative session by creating a special license for casinos that don't allow smoking — specifically a proposed Cedar Rapids casino — enacting a 10-year moratorium no new traditional gambling licenses, and sharing more casino profits with non-profit groups and counties that don't have licensed gaming casinos.

'I think that's a very difficult thing for the General Assembly to do,' House Speaker Kraig Paulsen, R-Hiawatha, said Thursday.