DES MOINES — Iowa’s state-licensed casinos weathered a tough financial year marred by flooding — especially in western locations — that watered down overall revenue by about $6.8 million and washed away profits at more than half the facilities.
In total, 19 casinos licensed by the Iowa Racing and Gaming Commission took in nearly $1.457 billion for the 12 months that ended June 30. That was down about a half of a percent from nearly $1.464 billion in gross adjusted revenue for the previous year. The fiscal 2019 total also was short of the record of nearly $1.47 billion in gross adjusted revenue set in fiscal 2012.
“The majority of the decline is coming from the west coast” of Iowa, said commission administrator Brian Ohorilko.
Violent storms, high water and new competition from a Ponca tribal casino in Carter Lake significantly affected revenue at larger casinos in Council Bluffs and Sioux City, dropping their yearly take by a combined $23 million, he noted. “That market in the western part of Iowa was a major contributor to the overall decline.”
Overall, 19,863,057 customers were admitted to state-licensed casinos last year, which was down by 840,112 from fiscal 2018. Ohorilko said there has been some yearly slippage in casino admissions, but the decline was exacerbated this year by bad weather.
In all, nine casinos posted higher revenue numbers last fiscal year, while 10 reported declines — the same ratio as in fiscal 2018.
The take by state and local entities that benefit from the 22 percent tax rate on casino revenue slipped by a like amount of about one-half of 1 percent to $318 million in fiscal 2019, Ohorilko said.
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Wes Ehrecke of the Iowa Gaming Association, an umbrella group for the state-licensed casinos, said many of the venues posted favorable numbers given the conditions many faced in attracting customers.
“It seemed like every weekend, we had some brutal weather earlier this year,” Ehrecke said. “The rains came and the floods came, and so I think that speaks to the casinos being good premier entertainment destinations that people would still try to make it out and visit them.
“If you look at the kind of weather we had this spring at various locations, and to be able to keep it flat and fairly stable in spite of the storms and the flooding we’ve had since the beginning of the year, that has a major impact on people wanting to come to our casinos when they are dealing with bigger issues with their farmland and other things,” he added.
Ohorilko agreed the casinos likely would have posted an overall positive year had they not been hit with flooding and other extenuating circumstances. “But this is Iowa and things happen,” he said.
Gross adjusted revenue at three casinos in Council Bluffs, where Missouri River flooding forced the closure of parts of Interstate 29, Interstate 680 and other thoroughfares, declined from 2.5 percent to almost 5 percent, while Sioux City’s Hard Rock casino saw a $5 million, or 6 percent, drop in revenue and a 12 percent decrease in admissions, Ohorilko said.
Despite Mississippi River flooding, the Quad Cities market was fairly stable. Still, it saw a market shift with the Bettendorf Isle of Capri casino’s revenue slipping by about 5 percent but the land-based Rhythm City casino taking in about $5 million more.
“In years past, that property would close for days when that river flooded. That did not happen this year,” Ohorilko said of the casino, which relocated away from the river to a land location near Interstate 80.
Up river, the Casino Queen in Marquette posted a significant decline after undergoing an ownership change, while the Grand Falls casino at Larchwood in northwest Iowa was among the best performers with a revenue boost of about 10 percent, or $5 million.
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Overall, Ohorilko said Iowa’s casino gambling industry has a “very stable, predictable market” that experiences yearly fluctuations of about 1 percent.
He said he does not expect that to change significantly when sports betting becomes available through casinos by as early as next month.
“I don’t necessarily believe that we’ll see significant returns from sports wagering, but I think it will help keep the market stable,” Ohorilko noted. “We might see some slight increases on the casino side as well, but I think from an admissions standpoint, it will certainly help with admissions and that’s been one piece of the industry that has just continued to decline year over year for quite a number of years and so I think that will be one positive thing that will come out of the sports legislation.”
For their part, casino operators anticipate that adding the sports-wagering option will bring in new and existing customers to Iowa’s gambling enterprises, Ehrecke said. “We’re optimistic that it will.”
The casinos’ per capita “win” was up slightly from $71 in fiscal 2018 to $73 this past year, which may mean fewer casual players were coming to casinos, players in attendance were spending more time at the various locations or casinos may have lowered their overall payout percentage on slot machines, Ohorilko said. Also, more customers have been interested in penny slots that don’t pay back as much as dollar slots, he added.
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