 Todd DormanTodd Dorman is a columnist for The Gazette. His blog has been bringing smiles to readers' faces since November 2007. |
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Convincing the gaming commission to live with “not devastating” will not be easy
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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The dumbest idea I’ve ever heard of; building a gaming casino and enlarging the entertainment district right next to the police station. The proximity alone should scare people looking to relax and have a good time away.
I find it interesting, though not surprising, that these seemingly high-flying investors seem to lose sight of economic conditions. Up-scale shops and a casino are great, but if unemployment continues to remain high, and those with money are spending less of it, who’s going to support these lofty ventures? It’s likely to be people who can least afford it, much like the lottery, only on a grander scale so they can lose what little money they have more quickly. Now, I’m not implying that by not building a casino you’re saving people from themselves, although there could be some merit to that argument if I were so inclined. There’s only so much gambling money out there, and the pot of gold at the end of the rainbow isn’t likely to be as big as these guys believe. If the venture goes bust, are these three going to pay off creditors, employees, etc., or will it be just another corporation that folds and writes off the entire mess? For that matter – what do you do with such a grand building if that happens? Call me a fatalist, but I think in the end, the only people who will come out okay on this will be the investors, regardless which way it goes. Everyone else will likely wish they’d have stayed home.
You obviously don’t understand the concept of investing. These four groups want pony up some cash, let them. If it fails, they will loose their investments. Not sure how you think they will come out “ok”.
Personally, I’m tired of the government telling me what I can and can not do. Anyone that uses the excuse that this should not happen to “protect the people,” should stay out of other people’s business. This city has been crying about needing money for flood protection, well here you go. If investors wan to risk their money on this project, who are we to say no when the city needs flood walls.