Will saturation cause consternation, or is it an exaggeration?

It depends on who is doing the explanation.

Todd Dorman
Published: April 7 2014 | 10:30 pm - Updated: 8 April 2014 | 8:07 am in

Yes, I still struggle with an addiction to writing about gambling. Perhaps you've noticed. Sorry.

In my defense, I was immersed for six-plus hours last week in the debate over a proposed Cedar Rapids casino project. It’s as if I’ve become saturated.

And saturation is not good, according to folks urging the Iowa Racing and Gaming Commission to reject a license for Cedar Crossing Casino. At last week’s lengthy public hearing on that license application, “saturation” took its place next to “cannibalization” as the primary lexicographic weapons being wielded against the Cedar Rapids project.

It’s well known that Dan Kehl fears a Cedar Rapids facility will cannibalize a sizable chunk of revenues from his Riverside Casino & Golf Resort. Market studies say he should. But the owner of three Iowa casinos also, apparently, is worried about all of the gambling going on in the state.

He cited numbers from a state-commissioned market study by Marquette Advisors showing that Iowa now has one “gaming position,” such as a slot machine, for every 105 adult residents. Compare that to Missouri, with one position per 171 adults and Indiana, with one for every 177.

“We are already saturated,” Kehl said, warning of a “Nevada-style” market ahead.

Not so fast, said Brent Stevens, part of the management group that would run Cedar Crossing. Even with its addition, he says, the Cedar Rapids-Iowa City market would have one gaming position for every 173 adults. And just look at Dubuque, home to two casinos, with one position for every 43 adults, or the Quad Cities, where the ratio is 1-to-112. He called Kehl’s Nevada-style gambit a “straw man argument.”

“We believe limited competition is healthy,” Stevens said.

I asked Commission Chairman Jeff Lamberti whether the Iowa-has-enough-gambling argument would carry weight with his five-member panel. “Probably not a lot,” he said, contending that commissioners would dig into the details of Cedar Crossing’s merits and market effects, leaving the big-picture hand-wringing about gambling in Iowa to the Statehouse. The commission makes its final call on April 17 in Council Bluffs.

Still, “enough already” is a politically potent argument looming in the background. Gov. Terry Branstad ran on a no-expansion platform against Gov. Chet Culver, who favored adding casinos. Expansion generally doesn’t poll well. A recent Iowa Poll showed Iowans against legalizing Internet gambling 71-25. The explosion and swift removal of TouchPlay lottery terminals showed that expansion can still meet stiff resistance.

And yet, a 2011 state survey found that 69 percent of Iowa adults gambled during the last six months and 42 percent played in the last 30 days. Oppose for show, gamble for dough.

Iowa has 21,566 gaming positions. That’s a lot, almost enough to give a slot machine to every resident of Muscatine. Each position brings in an average of $183 per day, adding up to $1.4 billion annually, according to Marquette.

But that also means the 1,100 positions proposed for Cedar Crossing account for just a 5 percent increase. That seems more “limited” and hardly a plunge into a full-on Vegas-style market. So the commission not only needs to worry about saturation, but also exaggeration.


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