State commission approves Greene County casino

BURLINGTON - Iowa has room for one more casino, state gaming officials said, and it's not in Cedar Rapids.

On a 3-2 vote Thursday, the Iowa Racing & Gaming Commission approved the state's 19th casino gaming license, this one for a proposed $40 million casino with hotel on Highway 30 in Greene County in west-central Iowa.

The vote - less than two months after the commission voted 4-1 against a $170 million casino proposal in Cedar Rapids because of casino saturation in the state - left Mayor Ron Corbett 'shaking my head” and saying that the Greene County vote 'only strengthened my resolve” to look to the Iowa Legislature and Iowa's gubernatorial candidates for a path to bring a casino to Cedar Rapids.

'A lot of us think Cedar Rapids got the short end of the stick on this one,” Corbett said. 'I'm not ready to throw in the towel.”

How can it be that four members of the commission were so 'firm” in voting against the Cedar Rapids proposal, pointing to the commission's own two market studies that talked about casino saturation, only now to award a casino license in Greene County? Corbett wondered.

How can it be, he said, that Cedar Rapids - Iowa's second-largest city in Iowa's second-largest county - can't have a casino and Greene County, with a total population of 9,000, can?

Corbett said the state commission has continued its recent emphasis on adding 'cornfield casinos” in Iowa, and he said he feared that Greene County won out because its developer, Wild Rose Entertainment, already owns two existing casinos in Iowa.

'Maybe that was the real variable - Wild Rose is part of the existing club,” the mayor said.

‘Saturated' state

After what he called a 'close call” of a vote, Jeff Lamberti, the chairman of the five-member state commission who voted with the majority, said the commission will issue a joint statement at its July meeting that will say that the commission now believes the state's casino market is 'saturated.”

He said the commission likely will signal that it will not accept new applications for a state gaming license for some period of time.

Lamberti said he personally didn't think a 'formal moratorium” has ever worked very well. Instead, he pointed to an earlier commission, which in 2010 announced it did not want to consider new applications for three to five years.

The Cedar Rapids and Greene County applications came to the commission in the middle of the three-to-five-year period.

In the Thursday vote, Lamberti, an Ankeny lawyer, and Richard Arnold, a farmer and small business owner from Russell, both switched their votes and backed the Greene County casino proposal after voting against the Cedar Rapids proposal.

In short, the pair said the two proposals were different, most significantly so because they said the Greene County project would not siphon too much business away from any one existing casino.

In April, the two joined the four-vote majority in concluding that the Cedar Rapids project would take too much business from the Riverside Casino and Golf Resort.

The commission requested two casino market studies earlier this year, both of which recommended no new casino licenses in Iowa.

However, Arnold said the studies showed a Greene County casino would have a 'minimal” impact of between 3 to 8 percent on any one casino, and Lamberti said the biggest effect was to Prairie Meadows Race Track and Casino in Altoona outside of Des Moines, which he said the facility could weather.

He said the impact to Prairie Meadows may have been overstated in the commission studies.

In addition, Lamberti said Polk County and the Des Moines metro area and its robust economy have 'advantages” that other rural parts of Iowa such as Greene County are not experiencing. Both he and Arnold said the Greene County casino will provide an economic boost for Greene County and the west-central Iowa counties around it, all of which supported the casino proposal.

Commission member Dolores Mertz, a farmer now living in Algona, voted with Lamberti and Arnold in favor of the Greene County proposal. Mertz was the lone vote in favor of the Cedar Rapids casino proposal, and on Thursday she repeated that competition is good, 'it makes you more alert, a better observer,” and prompts a person to make improvements to keep up.

She also said rural Iowa needs an economic boost, too, which she said a casino can provide in Greene County.

'Can't rural Iowa have a little piece of the action?” she asked.

Commissioners Carl Heinrich of Council Bluffs, past president of Iowa Western Community College, and Kristine Kramer, the owner of a car dealership in New Hampton, voted against the Greene County project, as they did the Cedar Rapids one.

Heinrich said Iowa's casino industry is in a slump, casino margins are narrower than most people think and the Greene County casino would take from existing casinos without adding much overall casino revenue to the state.

Kramer leaned on the commission's two market studies, which recommended against new casinos, and she said the Greene County supporters of the casino seemed more interested in the casino's event center for weddings and other events and the hotel than they were in the casino.

‘Doughnut hole'

In making their case to the commission, Greene County casino supporters and Wild Rose Entertainment of West Des Moines, which will build and operate the casino, said Greene County and counties around it in west-central Iowa represented something of a 'doughnut hole” as the last remaining spot in the state that was underserved by a casino.

Lamberti said a look at the Iowa map seemed to show that the Greene County proponents were on to something.

The Greene County proposal was helped, too, because the nearest casino to it in Emmetsburg is also operated by Wild Rose Entertainment.

After Thursday's commission vote, Tom Timmons, Wild Rose's president and chief operating officer, said the company will from economies of scale that will ensure that both the Emmetsburg and Greene County casinos do well.

Timmons said the 3-2 vote showed how difficult it has become to get a license in a state with 18 existing casinos.

'We're probably approaching the point” of the last license for a time, he said.

'I feel for them,” Timmons said about the Cedar Rapids casino investors and supporters. 'To watch this vote today, I know what they went through. You go through such an ebb and flow. We just came out on the right side of it.”

Greene County Supervisor Guy Richardson said Greene County's proposal was always different from Cedar Rapids's, but he said Greene County always supported the Cedar Rapids project and felt bad when the commission voted against it.

'Frankly, I think the Cedar Rapids project should be happy about this” vote for Greene County, he said. 'I think it gives them some hope that there's some other criteria that can give them a chance of getting their casino license.”

Cedar Rapids City Council members Justin Shields said he was left with the impression that the state commission delivers for and protects casino operators already in Iowa such as Wild Rose to the detriment of a competitor like Gray and the Cedar Rapids casino proposal.

'They never told us that was part of the rules,” Shields said. 'They never told us, ‘You better get in early and we'll protect you.'”

He said he wasn't sure what the next step will be to try to bring a Cedar Rapids casino to reality.

'We're never going to give up the fight,” Shields said.

The Greene County casino in Jefferson is slated to open in July 2015. It is estimated it will generate between $28 million and $33 million in revenue a year, of which between $5 million and $6 million will be new revenue to the state not taken from existing state-licensed casinos, according to the commission's two market studies.

Those same studies said the Cedar Crossing Casino in Cedar Rapids would generate between $81 million and $82 million in annual revenue, of which $22 million to $26 million would be new revenue to the state and not revenue taken from other state-licensed casinos.