So I guess it’s still not all water park under the bridge.
Nearly a year after Linn County voters gave a big old “heck, yeah” to gambling, the Interstate 380 casino clash continues between Riverside Casino CEO Dan Kehl and Steve Gray, leader of investors seeking to build Cedar Crossing casino in downtown Cedar Rapids.
Kehl’s outfit spent more than $1 million trying to derail last March’s gambling referendum, with more than $3.4 million pumped in by both sides. On the Friday before the vote, he even vowed to build a water park here if voters turned down a casino. They responded by giving his side a splashy 61-39 loss at the polls.
Now, as the Racing and Gaming Commission considers Cedar Rapids’ bid for a license, the battle is being fought with market studies. My gravity model can beat up yours. My New Orleans consulting firm knows more about cannibalization than yours. With tens of millions at stake, this is no playground scuffle.
Cedar Rapids investors’ study, by TMG consulting, says a Cedar Rapids casino would take just a wafer-thin slice of Riverside’s revenues, about $7.9 million annually from a roughly $90 million pie. But Riverside’s study, conducted by Innovations Group, says Cedar Crossing would actually devour $28.2 million.
Innovations Group uses data from players club cards swiped at Riverside, giving them ZIP codes, visits and bucks spent. According to those numbers, Riverside gets 28 percent of its business from players who live within 30 minutes of Cedar Rapids, and it would lose $21 million in revenue from within that zone if a new casino comes to the state’s second-largest city. In the populous 52402 area code, gamblers would go from having to drive 52 minutes to Riverside to a 5.08-minute drive to Cedar Crossing.
In other corners of capitalism, that would be good news for Cedar Crossing. But in the hothouse world of state-regulated casinos, where the commission’s main goal is to protect the investments made in existing facilities, sucking big bucks from your competition is bad news.
Gray, of course, disputed those numbers in a couple of stories by Rick Smith. He also raised a fair point that if Cedar Rapids is such a vital market for Kehl, why hasn’t Riverside’s non-profit partner sent more of its revenues to Cedar Rapids-area causes and organizations? Where gambling bucks are concerned, I-380 has been a one-way street with bucks flowing south only.
Well, except for the Vote No campaign and that water park offer.
All of this, of course, is posturing. The big players are putting out their markers for the real action ahead. And that comes March 6 in Altoona, when two firms hired by the commission to do independent market studies hand in their homework. That’s when the cannibalization gets real. The bought and paid-for numbers we’re parsing today will be a memory.
After that comes the spin zone, where those market studies get jammed by opponents and backers into competing narratives of Cedar Crossing both as menacing cannibal and economic miracle. Only after a public hearing April 3 in Cedar Rapids and the big decision April 17 will we reach the end of the flume.