The investor group behind plans for a new Cedar Rapids casino said Wednesday that the new gambling venue will generate an estimated $80 million in annual gross revenue, with only $18 million of the total being taken from existing casinos in the state.
Furthermore, about half of the $18 million in revenue cannibalized from existing casinos will come from the Meskwaki Casino in Tama County, an American Indian casino that is not a state-controlled casino, Steve Gray, who is heading up the investor group Cedar Rapids Development LLC, noted.
One of the significant hurdles that the casino investors will need to leap before they receive a gaming license from the Iowa Racing and Gaming Commission — if Linn County voters approve gambling for the county in a vote on March 5 — is whether a Cedar Rapids casino will steal too much business from nearby casinos in Riverside, Waterloo and Dubuque and harm their businesses.
The Linn County casino opposition group, Just Say No Casino, is thought to be receiving financial backing from casinos expected to be impacted by a Cedar Rapids casino.
In a meeting Wednesday with the Gazette's editorial board, Gray and associates delivered the results of a consulting company's study that concludes that a Cedar Rapids casino and related new development would bring in about $30 million in its first year in annual gaming tax revenue, sales tax revenue and property-tax revenue to the state, city, county and school district and another $2.4 million to the non-profit Linn County Gaming Association for distribution to local non-profit groups.
Consultants Harvey Siegelman and Michael Lipsman of Strategic Economics Group of West Des Moines conducted the property-tax and sales-tax analysis for the Gray group.
Gray and the group’s legal counsel, Doug Gross of Des Moines, reported that the investor group’s analysis of the gambling market in Cedar Rapids and Iowa initially envisioned that a Cedar Rapids casino might have 1,500 slot machines and 40 gaming tables. However, that size of gaming operation might have too great an impact on existing casinos, Gray said, so the plan now is for a "right-sized" casino with 1,000 slot machines and 25 gaming tables. He called that the "sweet spot" where a casino could thrive without harming other casinos.
In 2011, the Riverside Casino and Golf Course had 1,151 slot machines and 47 gaming tables and the Isle Casino Hotel Waterloo had 900 slot machines and 36 gaming tables, said Gray, reading from a state report.
Gray said his casino the investor group, which includes Drew Skogman, vice president of Skogman Homes, has now hired consultants to help the group pinpoint a site for the proposed new casino. The cost for engineering work required in site selection is too great for the investors to do the work until they see if voters agree to gambling in Linn County on March 5, Gray said.
However, Gray said that the consultants have said the casino should be located in a commercial area somewhere between Boyson Road at Hiawatha and Highway 30 on the south side of Cedar Rapids and preferably on a site visible from Interstate 380 or within 1,500 either side of Interstate 380.
"Visibility and accessibility" are key, Skogman said.
Gross said the hope was that the casino site also would bring "ancillary benefits," and he volunteered one benefit might be assistance with the city’s flood protection system. However, he and Gray said that did not mean the casino definitely would located downtown or across the Cedar River from downtown.
At the same time, Gray said the Cedar Rapids casino would be "urban, metro and upscale," and he singled out Rivers Casino in downtown Pittsburgh, Pa., as a complete entertainment venue like he thought the Cedar Rapids casino would be. Gray said the investor group might need six to 10 acres for the facility or an area equivalent to three to four city blocks.
With fewer than 50 days until the March 5 vote in Linn County on gambling, the Vote Yes Linn County campaign aired its first television commercial on Wednesday. Look for radio spots, direct mail and an absentee ballot effort, Marcia Rogers, the campaign’s communications director, said."We’re all guns blazing," Gray added.