Survey casts for interest in C.R. casino

April 1, 2014 | 1:27 am

CEDAR RAPIDS -- Local private interests are conducting a phone survey to measure interest in a gaming casino in Cedar Rapids even as they conduct market research to see if a casino could succeed here, city officials acknowledge, noting that the city is not part of the effort.

The survey of about 15 minutes in length asks if a person would support a gaming casino in Cedar Rapids, and if so, where the best location for a casino would be, in downtown, along Interstate 380 or at Westdale Mall.

In the phone survey, people also are asked if and how they voted in 2003 when residents in Linn County, including Cedar Rapids, voted against casino gaming by a margin of 52.84 percent to 47.16 percent. The state of Iowa requires a county's voters to approve casino gaming in a county.

Dan Kehl, an executive at Kehl Management Inc. and CEO of casinos and resorts in Riverside and Larchwood, on Tuesday said his company is not behind the phone survey under way in Cedar Rapids and Linn County.

However, Kehl said launching a casino in Cedar Rapids would be difficult for three reasons:

It couldn't make enough money in a part of the state already well-served with casinos;

Kehl would fight the idea because a Cedar Rapids casino would "cannibalize" business at his 6-year-old Riverside Casino & Golf Resort and the 5-year-old Isle of Capri Casino in Waterloo;

The Iowa Racing and Gaming Commission, which must approve any gaming license, concluded just two years ago that any more casinos in the state would profit only at the expense of existing ones.

Kehl, whose Iowa family opened the state's first riverboat casino in Dubuque some 20 years ago, said his company more than any other might be in a position to open a Cedar Rapids casino because it might be able to make the case that such a casino and his company's Riverside casino were one entity serving the Cedar Rapids and Iowa City market.

Kehl said his company investigated the prospect of opening a Cedar Rapids casino in the last year or so at the request of Cedar Rapids and Linn County people who were interested in locating one downtown or at Westdale.

"Financially, it wasn't feasible," Kehl said. "And it would devastate the Riverside casino. That (Cedar Rapids) is a major market for us."

Kehl noted that the gaming commission conducted a comprehensive study before it approved an 18th license in the state two years ago for Larchwood in far northwest Iowa. At the same time, the commission turned down three other requests -- from Tama, Fort Dodge and Ottumwa -- because of the likelihood that those three casinos would steal business from existing casinos.

"So do I believe at the end of the day that the commission would grant a license for Linn County?" Kehl said. "That was something we considered. And we don't believe that would happen just based on their own market studies and what they've done."

He said the commission's statewide study only held out the possibility that the Des Moines metro area might be able to support a second casino.

City Council member Justin Shields, who has expressed support for a casino in Cedar Rapids in recent years, said Tuesday that interest from some in the community for a casino "has intensified" in the last year or so. At the same time, Shields said he was not involved in the local phone survey. However, he suspected it was a group of local casino backers, not a casino company that was behind the survey.

Jim Piersall, a Cedar Rapids attorney who helped head up Linn County Citizens for Riverboat Casino Inc. in 2003, said he did not know who might be involved in the casino survey. The 2003 proposal would have put the casino at the Sinclair meatpacking site, which Piersall and others owned at the time.

Jim Cannon, who led the citizen petition drive to get the gaming measure on the ballot in 2003, said he didn't know who was behind the current casino inquiry either. A casino still makes sense for the city, he said.

Karyl Jones, director of operations for the gaming commission, said there is no moratorium in place that prohibits communities from applying for a gaming license. At the same time, she knew of no one who has expressed an interest in applying for a new license in a community that does not now have gaming.

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