Iowa gambling regulators last week narrowly voted to approve the state’s first new casino in four years but sent strong signals it’s likely to be the last one for some time.
By a 3-2 vote Thursday, the five-member Iowa Racing and Gaming Commission approved the $40 million project in Jefferson by Wild Rose Entertainment, which already operates casinos in Emmetsburg and Clinton. It will be the 19th state-licensed casino and the first approved by the commission since 2010. The state also has three casinos operated by American Indian tribes.
With 3.1 million people, Iowa has 18,000 slot machines and about 470 tables for poker and other games at the 18 state-run casinos. Iowa allows one of the widest ranges of legalized gambling choices among 41 states with casinos, including charitable gaming, pari-mutuel wagering, lotteries, commercial casinos, Indian casinos, dog racing casinos and a horse racing casino.
Nationally, there are about 1,000 casinos generating gross revenue of nearly $68 billion.
William Thompson, a professor at the University of Nevada at Las Vegas who studies gambling, was surprised Iowa regulators approved the Greene County casino and puzzled the development will be in a rural area likely dependent on gamblers from small, farming communities. Thompson said money spent at the new casino would mean less for other local businesses.
“It amazes me that they keep pushing, but you’re always going to have investors that want more casinos and the government people will say hurray, hurray more tax money,” he said. “They’re going to drain the local economy.”
To the contrary, Wild Rose CEO Tom Timmins said the casino will provide sorely needed local facilities for banquets, weddings, and hotel rooms. The casino and hotel is projected to create 275 jobs in a community that has seen declining population for years.
The company promises to share 5 percent of the casino’s revenue — about $1.5 million a year — for charitable groups in Greene County and surrounding communities.
Last August voters in Greene County endorsed the proposed Jefferson casino with 75 percent approval, the highest level of support for an initial casino vote in Iowa.
The commission’s approval followed the panel’s rejection of a proposed Cedar Rapids casino by a 4-1 vote in April. At that time commissioners cited two studies that found Iowa’s gambling market to be saturated with so many casinos that new ones would simply snag customers from existing operations and reduce their revenue. It was estimated the Jefferson casino will take much of its estimated $30 million annual revenue from other casinos, primarily Prairie Meadows Racetrack and Casino in Altoona and the Wild Rose Casino in Emmetsburg.
Prairie Meadows, 70 miles southeast of Jefferson, opposed granting of a license.
Prairie Meadows generated nearly $187 million in gross revenue last year. It would lose an estimated $13 million to the new casino, about 7 percent of its annual yearly gross revenue.
Commission Chairman Jeff Lamberti concluded Prairie Meadows “will be just fine.”
He and commissioners Dolores Mertz and Rich Arnold justified their votes by saying rural areas deserved to benefit from gambling as much as larger cities.
Commissioner Carl Heinrich cited the impact on Prairie Meadows and Kris Kramer pointed to the consultant studies’ conclusions in casting no votes.
The Emmetsburg casino, 90 miles north of Jefferson, also is owned by Wild Rose Entertainment so the estimated loss of $3.6 million, or about 11 percent of its annual gross revenue, would only shift revenue from one property to another.
The studies warned that increasing competition from neighbors, primarily Illinois and Wisconsin, is likely to cut into the number of gamblers in Iowa. The state gets nearly half of its gamblers from surrounding states with nearly a quarter coming from Nebraska.
Six of Iowa’s casinos are within easy driving distance of Nebraska with three located in Council Bluffs, two in Sioux City, and one in Larchwood in the northwest corner of the state.
The reports concluded that Iowa’s modest population growth coupled with adjacent state competition pulling gamblers away means Iowa should stop building casinos.
Lamberti said that situation will be discussed at a July 31 meeting in Johnston.
“I think this vote clearly reflects a belief that this is a saturated market,” he said. “As you look at the studies and where we’re at, I think that’s a safe assumption.”
The commission stopped granting licenses between May 1998 and November 2004 and again between July 2005 and May 2010.