EMMETSBURG, Iowa (KCRG-TV9) — Iowa’s gaming regulators completed one of their finals steps before deciding which— if any— of the Cedar Rapids casino proposals are worthy of a gambling license.
A look at all three Cedar Rapids casino proposals for 2017.
At their meeting in Emmetsburg Thursday morning, commissioners reviewed two recently released market impact studies.
If you remember, both showed any of the three casino options would “significantly” cannibalize business from others in the area. Marquette Advisors estimated 45%-56% of a Cedar Rapids casino’s annual revenue would come from others. WhiteSand Gaming figured income would be lower and the cannibalization rates higher, 89% to 92%.
Both agreed Riverside’s casino would be hit the hardest, losing about 20% or more of its revenue. Also, that Iowa’s gaming market is saturated, saying gamers can easily find a place to play that’s, at worst, a short drive away.
High cannibalization was a big reason Linn County didn’t get a gaming license from commissioners in 2014. This time, they didn’t elaborate much on how they’re feeling as the licensing process heads into its final weeks before a decision.
Here’s what commissioners did say, however.
The regulators, yes, have concerns when it comes to cannibalization. Both market studies suggested high enough rates at Riverside’s facility could cost the casino jobs and reduce its gaming devices.
Commissioners also said they’re going to have to weigh the differences between the two studies, which varied quite a bit in some ways.
WhiteSand Gaming is new to the Iowa Racing and Gaming Commission. Its research showed a more “pessimistic view” of Iowa’s gaming market, according to one commissioner. WhiteSand officials said they anticipated state casinos would underperform expectations in coming years, leading analysts to reduce their estimated revenue projections for the proposals by up to $27 million, when compared to the other market study by Marquette Advisors.
Commissioners have used Marquette a couple times before 2017, most recently when reviewing the last Cedar Rapids proposal in 2014. Its most recent report showed Iowa could grab $47 million in new revenue if the larger of the two Cedar Crossing facilities was built.
Commissioners said they’re going to have to figure out which of the studies, Marquette or WhiteSand, sounds more accurate when rendering a decision.
“I think I almost have to say, ‘I believe this one more than I believe this one,’” said Jeff Lamberti, a current commissioner and former chair with the IRGC. “Not because I think either one is necessarily flawed, but I have to come down on the side of one. That’s different than what we saw three years ago.“
Lamberti said three years ago the market studies had differences that were “relatively narrow.”
Those pitching the three casino proposals came away with mixed feelings following Thursday’s meeting.
The Cedar Rapids Development Group, which is behind the Cedar Crossing proposals, felt the Marquette study’s large estimation of new revenue for Iowa suggested a case could be made for the large facility, planned for the west side of the Cedar River.
CRDG representatives also said Riverside’s 20% or higher loss in revenue is a bit misleading. They pointed out the percentage is more like 10% if you take into account the overall budget of the company that manages Riverside, given that it operates two other facilities.
“We’re very optimistic about what’s going to happen in November,” said John Swain with Cedar Rapids Development Group. “We’re feeling pretty good about it. We’re looking forward to the decision.”
Those representing Wild Rose Entertainment told TV9 following the meeting they doubted the accuracy of the cannibalization rates featured in each of the market studies.
Wild Rose officials touted their small, boutique-style casino, saying its limited amenities would be the best fit for downtown Cedar Rapids, supplementing nearby restaurants and businesses instead of stealing customers.
“We’re not going to a public vote,” said Wild Rose President Tom Timmons. “It’s five people. What do they want? A— do they want a casino in Cedar Rapids? B— what size do they want, if they do want it? If they don’t, then shows over.”
Commissioners are looking at three options in this latest bid for a gaming license in Linn County. Two are coming from CRDG. One of them-- virtually the same proposal as three years prior, a $196 million Cedar Crossing development on the west side of the Cedar River. The other, a smaller Cedar Crossing Central plan that calls for putting a $106 million casino in the core of downtown by replacing a parkade next to the U.S. Cellular Center.
The third option comes from Wild Rose Entertainment, which plans for a smaller “boutique” casino up on First Avenue Southeast, next to the Skogman building. Its plan calls for an estimated construction cost of about $42 million.
The Iowa Racing and Gaming Commission will vote on the casino proposals in Dubuque, November 16.