Convincing the gaming commission to live with "not devastating" will not be easy

Todd Dorman
Published: October 7 2012 | 4:05 am - Updated: 1 April 2014 | 1:36 am in
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The odds of Cedar Rapids getting a casino could hinge on the definition of “not devastating.”

Those are the words Steve Gray used in a meeting with our editorial board Thursday to describe the impact a Cedar Rapids facility would have on existing nearby casinos. Gray, CEO of ImOn Communications and three other firms, is among the leading local investors in the $80 million to $100 million project.

The Iowa Racing and Gaming Commission looks at a lengthy set of criteria before deciding whether to issue a gambling license, a list that includes a successful countywide referendum. That’s a big hurdle, but it may not be as difficult as convincing commissioners that they can live with “not devastating.”

Because, in recent years, there has been no bigger factor in halting gambling expansion in this state than the notion that new casinos would “cannibalize” business from existing ones. The market in Iowa, according to the experts the commission consulted back in 2009, is largely saturated.

In May 2010, when the commission granted a license to the far northwest reaches of Lyon County, it sacked proposals from Ottumwa, Fort Dodge and Tama. Commissioners pointed to evidence that Fort Dodge and Ottumwa would each pull business from existing casinos. Tama’s bid was dogged by financing issues.

On that same day in 2010, commissioners shut the door on more licenses for at least three to five years. Gray, fellow investor Drew Skogman and their Des Moines attorney Doug Gross believe, after talking with some commissioners, that the panel will be ready to listen in 2013.

“We’re comfortable that we’ll get a fair hearing,” said Gross, who won the Republican nomination for governor in 2002 and is a former chief of staff for Gov. Terry Branstad.

Gray says “not devastating” means that a Cedar Rapids casino would not threaten the solvency or viability of other casinos, according to an unnamed consultant hired to analyze the market. Existing casinos wouldn’t suffer cash flow issues or be forced to fire workers. So “not devastating” is not exactly sunshine and roses for nearby casinos. They’ll take a hit. Just not a fatal one.

Smartly, local investors are trying to pitch their project as something different, a potentially less threatening “urban” casino without its own hotel. It’s not a big-draw resort. It’s meant to attract local gamblers who now drive out of town.

It may help. So would a wide referendum victory. But breaking into a casino cartel that’s more interested in its profitable comfort than allowing more competition is going to be very difficult. Much will depend on the quality of the local project and the skillfulness of the pitch.

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