New Casinos Could Draw Profits Away From Wild Rose
While proposed casinos could be a boon for Webster and Lyon counties, those same gaming enterprises could cut into the profits for Wild Rose Casino and Resort in Palo Alto County.
The Iowa Racing and Gaming Commission (IRGC) is considering awarding gaming licenses to four additional entities. If approved, Iowa could see new casinos constructed in Webster County, Lyon County, Tama, and/or Ottumwa. Currently, there are 17 state-regulated casinos and three Native American casinos operating in the state.
According to information on the IRGC’s Web site, Palo Alto County overwhelmingly passed a gaming referendum by 71.1 percent voter approval in 2003. A gaming license was awarded in 2005, and Wild Rose Casino and Resort opened in Emmetsburg in 2006.
Voters in Webster County passed a gaming referendum in 2004 by 57.7 percent. However, the Commission denied that bid for a gaming license in 2005. In 2008, Lyon County voters approved their gaming referendum by 62.1 percent.
The five members of the IRGC met on Jan. 14, and acknowledged the financial plans for the Webster and Lyon projects, while questioning the viability of the Tama and Ottumwa proposals. Webster County Gaming LLC would like to see a casino constructed in Fort Dodge, while Lyon County Resort and Casino would like to see a casino constructed near Larchwood in the northwest corner of the state along the Iowa-South Dakota border.
In order to analyze the impact that additional casinos could have in Iowa, the IRGC retained the services of two nationally recognized companies in the gaming industry–The Innovation Group and GVA Marquette–to conduct a study to identify any unserved or underserved markets in the state. The study also provided projections as to the potential revenue that could be generated by those markets and the projected impact on existing licensed casinos in Iowa.
Using 2008 data, the study by The Innovation Group found that a Lyon County casino would potentially decrease Wild Rose’s gaming revenue by between two and five percent. The Webster County casino would impact Wild Rose the greatest–decreasing revenue by 16 to 21 percent.
Gaming revenue at Wild Rose is the lowest among the 17 casinos–Wild Rose took in $27.7 million in 2008, while the top earning casino–Horseshoe – Bluff’s Run–took in $197.2 million.
The study stated: “On a property by property basis, it is important to analyze cannibalization from a percent decline perspective. We found that the Wild Rose – Emmetsburg facility would be most impacted. We estimated that gaming revenue at Wild Rose would decline from 20 percent to 27 percent depending on the investment level, due mainly to the proposed Webster County facility.”
The IRGC will meet again on Mar. 23, to hear the presentations from the applicants before visiting each of the proposed sites on Apr. 7 and 14. They will then hold a public hearing on May 4. This will be the time for any member of the public to address the Commission about the applications they are considering for licenses. A final decision is expected May 13.