Two vendors will prepare Iowa gaming market studies for the Iowa Racing and Gaming Commission as part of the commission’s consideration of a Linn County gaming license application.
The vendors, The Innovation Group of Littleton, Colorado and Marquette Advisors of Minneapolis, were selected unanimously by the five-member Iowa Racing and Gaming Commission (IRGC) from among four vendors who applied to conduct the studies.
Representatives of all four vendors gave presentations to the IRGC at their meeting Aug. 29 at the Riverside Casino & Golf Resort.
The studies will examine the overall landscape of gambling in Iowa, including casino gaming, and the potential impact of a new casino proposed for Cedar Rapids.
Factors to be considered in the studies include the projected additional revenue from a new casino in the state, cannibalization of revenue from existing casinos, socioeconomic impacts and employment levels.
The studies are due for completion by Dec. 30, according to commission chair Daryl Olsen.
Both of the vendors chosen Tuesday have extensive experience with gaming market studies, including in Iowa. The Innovation Group conducted statewide gambling market analyses in 2009 and again in 2021-22, and Marquette Advisors has completed three such analyses in Iowa, most recently in 2017.
Representatives of both firms shared their philosophies in their presentations to the IRGC Thursday.
Alex Goldstein, a manager with The Innovation Group, said the firm has been collecting commercial gaming data since state-licensed gambling began in Iowa in 1991.
“We’ve had the benefit of collecting data for clients for over 30 years,” he said, “really helping us understand how players visit casinos and how much they spend, depending on their distance from said casino. With that knowledge we have, not just in Iowa, but nationwide, we’re able to apply that to our analysis. And for our 2021 study, we mapped player based databases for several of the Iowa casinos, and interviewed high-level casino management to get an understanding of the local dynamics that each operator deals with on a day to day basis, and also an understanding where their players are coming from.”
He also noted that since the latest study would essentially comprise an “update” of the 2021-22 study, a new report could be prepared in “a very time-efficient manner.”
He said previous reports projecting revenue from proposed casinos has been accurate, in most cases, within 5% of actual revenue figures, and noted said the firm’s 2021 study was conducted in the midst of the COVID-19 pandemic.
“Now we’re at a point where things are starting to level off,” he said. “We’ve seen the gaming revenue across the state in the last couple years has been about even at $1.7 billion. What we saw in 2021 was the amount of visits were going down while the amount of spending was going up. And that’s starting to level off again to those pre-pandemic periods.
“Understanding how the market dynamics have changed over the last three years would be really important,” he added.
Louis Frillman, president of Marquette Advisors, said that his firm conducted market studies for Linn County gaming license applications in 2013 and 2017, and has been in the gaming consulting business since the inception of tribal gaming in 1989.
“Today, we’re working in markets like Iowa that have considerable history, and it’s really about battling for market share and understanding the dynamics of each individual market,” added Marquette Advisors senior vice president Brett Wittenberg. “Certainly, we’ll benefit and have efficiencies related to our past modeling, our familiarity with the market and these facilities, but also acknowledging that the numbers are very different. The facilities have changed. Demographics have changed. We need to account for that in our modeling in general. And individual markets have changed. Cedar Rapids is a different market.”
Part of that change, he said, has come in terms of demographics.
“We don’t know this locally yet, but gamers nationally are younger,” he said. “Very quickly, our casino players became younger. We’ll need to understand if that holds true in Iowa. Those are the kinds of things we need to understand.”
Anne Parmley, president of the Linn County Gaming Association, the nonprofit group that has partnered with Pacific Peninsula Entertainment for the Linn County application, said she’s looking forward to hearing the results of the studies.
She also said she feels the current application is similar to, but stronger than, the applications submitted in 2014 and 2017 – applications denied each time by the IRGC.
“This application only builds on past applications, all the time and commitment that the operating partner, Peninsula Pacific, has had to Linn County and Cedar Rapids over the years,” she said. “It’s an opportunity to refine and improve. It’ll be a great contribution to the vitality of Cedar Rapids and Linn County entertainment. We are planning partnerships with other community entities and restaurants.
“I’m here because I want to represent the nonprofits and the nonprofit needs,” she added, “but I’m also excited, as a lifelong Linn County resident, about the contribution that it will make to not only Linn County, but adjacent counties, as far as something for people to do, attract conventions and visitors, just get more people to visit Cedar Rapids, and then hopefully they’ll find it a place they might want to live.”
Casino operators have committed to donating 8% of overall proceeds to area nonprofit organizations. Ms. Parmley said that commitment will comprise $5 million to $7 million in nonprofit contributions in the casino’s first year.
Kim Pang, vice president of development for Peninsula Pacific Entertainment (P2E), the developer of the proposed casino, said a recent study conducted on behalf of P2E showed that a new casino would bring $80 million in new gambling revenue to the state – more than the $51 million in new projected revenue from the IRGC’s 2021 market study.
“For us, it’s all about revenue to the state, to Cedar Rapids, to Linn County and to our nonprofit partners,” he said. “We’ve been at this since 2013. We’re not going to stop.”
The Linn County Gaming Association and P2E will formally present their plans for the Cedar Rapids casino, dubbed Cedar Crossing, to the commission at their meeting Oct. 3 at the Isle of Capri Casino in Bettendorf.
However, Ms. Parmley said more detailed plans for the Cedar Crossing development would likely be released at a news conference before that meeting, likely sometime in mid-to-late September.
Other upcoming dates in the commission’s gaming license review process:
- Nov. 20 – A site visit and public input session in Cedar Rapids, at a location to be determined.
- Nov. 21 – Background reports from the Iowa Division of Criminal Investigation (DCI) could be reviewed in executive session at the commission’s regular meeting in Burlington.
- Dec. 30 – Deadline for submissions of market studies, which would allow commissioners time to review the market studies over the holidays.
- Jan. 23, 2025 – Public presentation of the market studies at the commission’s regular meeting in Jefferson.
The commission is slated to vote in a special meeting Feb. 6, 2025 whether to approve or reject the Linn County gaming license application.
The door was opened for a new Linn County gaming license application after a two-year state gaming license moratorium imposed by the Iowa Legislature was allowed to expire June 30.
The IRGC has twice rejected casino proposals for Linn County, in 2014 and 2017, after commissioners largely sided with opponents who argued the state’s gaming market was saturated and a new Linn County casino would substantially “cannibalize” revenue from existing state-licensed casinos.
But all five members of the IRGC are newly-appointed since the last decision. And Linn County voters have approved two referendums supporting gaming in Linn County, most recently in November 2021.
As a result of the second vote, developers are now allowed to seek a casino license for the county in perpetuity, without returning to voters for further approvals.
Developers and supporters first unveiled plans for a Linn County casino in Cedar Rapids, dubbed “Cedar Crossing,” in May 2022.
As proposed, Cedar Crossing, with a budget now estimated at $275 million, would incorporate Iowa’s 20th state-licensed casino, as well as bars and restaurants featuring celebrity chefs.
If approved, the casino would be built on city-owned property between F and I avenues NW and First and Fifth streets NW. Most of that property was previously occupied by the Cooper’s Mill restaurant and Best Western Hotel before those facilities were demolished due to damages sustained in the 2008 flood, and the property was subsequently acquired by the city.
Mr. Pang said in July he expects several factors will positively influence the IRGC in their review of Linn County’s gaming application, including “the location, the property, the community interest in getting a casino license, and the opportunity to bring tourism to Linn County, the second largest county in Iowa.”
