Tuesday, March 22, 2005

More Iowa Casinos?

Iowa’s gaming industry has changed dramatically over the past fifteen years. It was initially sold to the public as limited stakes variety of entertainment that would be based on a nostalgic riverboat theme. Real riverboats were required to cruise the Mississippi and later the Missouri. Gaming was initially limited to no more than 30% of the riverboat space, with the remainder devoted to other tourism friendly activities.

Those limits have all fallen away, as the state has become more intent on making real money (and collecting significant tax revenues) from gambling. Competition from other states clearly affected these changes, and Iowa seems to be winning in the gaming market. Gambling losses (or revenues from the casino perspectives) now approach $1 billion per year in Iowa casinos.

What was once oriented heavily toward border operations, which could attract patrons from other states, has been moving inland. An AP story appearing in today’s Omaha World Herald shows that this movement is not slowing. Ten casino-related projects are currently before the Iowa Racing and Gaming Commission, mostly involving interior Iowa communities. They include:

Community: Projected Cost ($millions) Projected Revenue ($ millions)
Washington County 107 92.3

Fort Dodge 50 40

Worth County 40 33.7

Waterloo 116 105

Waterloo 45 80

Black Hawk County 118 76

Franklin County 67 60

Emmetsburg 20 27

Ottumwa 24 39

Emmetsburg 35 35

These revenue figures are for the first year. Thus, in each case, the annual revenues (or losses to patrons) would nearly pay for, or in some cases exceed, the investment.

Where will these revenues come from? I doubt that tourists from far-off places are going to travel to any of these communities to gamble. If the revenue projections are going to be met (and indeed, they may not), they will be met from fellow Iowans. Though I recognize the attraction of what seems to be a license to print money, these communities should think hard about who they are probably getting it from.


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