A potential Cedar Rapids casino would cut into revenues at other eastern Iowa gaming properties and significantly damage Riverside and Waterloo, according to a study commissioned by the company that wants to build a land-based casino in Davenport.

Dan Kehl, who is leading the Scott County Casino LLC effort to buy the Rhythm City Casino and develop a $110 million casino and hotel in Davenport, said the study shows a Cedar Rapids casino would cut his company's revenues at Riverside Casino and Resort almost in half. Kehl and the Isle of Capri, which owns a property in Waterloo, actively opposed a gaming referendum earlier this year in Linn County.

The report, by New Orleans-based Innovation Group, shows a 43.5 percent decline in revenue at Riverside if land-based casinos are developed in Davenport and Bettendorf and a new casino in Cedar Rapids is built for opening in 2015. The Isle of Capri's Waterloo property would see a projected drop of 42.9 percent. The Wild Rose in Clinton faces a projected 13.6 percent drop-off.

A land-based Davenport casino would earn $79.9 million in its first year, but with a Cedar Rapids casino in the mix, revenues would be 7.1 percent less, according to the study.

The Isle's Bettendorf property would see a bump up of 6.1 percent through the benefit of being land-based, according to the study.

A vote on whether to issue a gaming license to Linn County is expected next spring by the Iowa Racing and Gaming Commission.

Kehl commissioned the report to study the Quad-City gaming market and determine the most viable casino location. Taking the potential Cedar Rapids casino out of the equation still would be a hit to Kehl's Riverside property, projecting a drop in revenue of 4.9 percent.

"We don’t consider it a hedge against Cedar Rapids but think it is a good idea to add a third casino," Kehl said."We’ve always been intrigued with the Davenport market."

Kehl said there are three possible scenarios with the land-based Davenport casino. The first is what he says is the most devastating possibility, that the Davenport casino is built, doesn't find the market projected for it and a casino opens in Cedar Rapids.

The second is the Davenport casino opens but doesn't find the projected market revenue but no Cedar Rapids casino is built. The last is that the Davenport casino opens to projections and no Cedar Rapids casino is built.

"I’m voting for number three," he said.

The study didn't delve into the effect of video poker that is allowed in Illinois bars and restaurants, but Kehl thinks that will have an impact, too.

(13) comments

Hawksfan23

Honestly Cedar Rapids deserves the casino more than Davenport. They waited patiently, have already agreed on a developer, have the revenue to build, have a location. They could break ground tomorrow.

Davenport on the other hand has been dragging this out for years, have an RDA and mayor that despise each other and won't cooperate, can't agree on a developer, one developer wants to sue the other one, concerns with the land. It's a big clusterf**k. I wouldn't blame the racing commission if they told Davenport to take a hike.

TruthOnlyBeTold
TruthOnlyBeTold

"They waited patiently, have already agreed on a developer, have the revenue to build, have a location. They could break ground tomorrow."


Linn County did not wait patiently and they can hardly break ground without a license from the Iowa Racing and Gaming Commission. The referendum to approve gambling that was recently approved is the first referendum to approve gambling to pass in Linn County. At least one other referendum was turned down. That same year, Washington County did approve a gambling referendum, which resulted in the Riverside Casino. To allow a casino now in Cedar Rapids, so close to Riverside Casino, would be unfair to both Riverside Casino and Washington County. If the Iowa Racing and Gaming Commission practices what it preaches about not allowing Iowa to become oversaturated with casino's, it will turn down the Cedar Rapids application. Moral of the story for Linn County should be, if you snooze you lose.

Downtrodden

And like I have been saying since Kehl entered into this race for a Davenport Casino...he is going to lose money in Riverside, IOC is going to lose money in Waterloo, thus, time to hedge by colluding on a Davenport deal and give us a small-time casino. What a joke this guy is, and what a joke (albeit a not-funny one) the RDA is.

qchawki

Small time casino huh...So Davenport should be waiting for MGM Grand to come build huh?

Downtrodden

No, this is a mid-market region. MGM would be stupid, and so is your comment. Perhaps a $250 million casino, such as the one Rodney and Clairvest proposed, instead of a place-holder casino designed to keep outside competition out of the state.

qchawki

Well Rodney and Clairvest did not propose a $250M casino. They are proposing a $125M casino. Stop looking at headlines and look into the details. Both plans for the actual casino are basically mirror images. The difference is in the supposedly promised surrounding development $.

Betttaxpayer

I have not seen or heard the plans for the Bettendorf Isle to come ashore. Anyone seen that plan out there?

freesenior

Perhaps no one will know when the number of gambling venues become saturated and the gaming market will be forced into retreat. Studies and marketing projections on a business dependent upon discretionary income are themselves a gamble because of they are subject to the rose colored glasses syndrome and tainted assumptions. Gaming by its nature is profitable for the house just on the basis of odds. The question is not if the house will win, but how much. That would seem to mean that the market could produce income on any revenue but the size of a sustainable source of viable customers is impacted by a multitude of considerations. Local high rollers down to lonesome widows that seek 20 dollars of entertainment from the penny slots are perhaps just perameters on such such models. Drive by customers, perhaps lured by other destination events offer variables that perhaps can be measured under a gambling business plan model. Big investments are geared to big return expectations and gaming is the poster child for that statement. Gambling establshments to a degee are akin to taverns. Even in hard times, folks find a couple of bucks to buy a beer. Some segments of a local population gamble and others do not. The question is how big is that segment locally and can it support gaming expectation profits without the more variable segment of destination travelers? Every casino has to figure that out and when more casinos are added, that destination market becomes smaller and competition more sharp. longjohn412 has a point with going big or going home. Perhaps it can be stated as go big or go to Vegas. Even Vegas feels it now. Free drinks and show comps are pretty much a thing of the past. Small market gambling will catch fish but they are smaller fish, and when the lake is fished out you can toss as much bait as you want, but there will be nothing there to bite it. Some think the market is already saturated. Communities that seek this type of business to enhance tax coffers and stimulate local business must be cautious as to their expectations and consider that the number of suppliers of entertainment in this industry is a most critical factor. Even cash cows can produce only so much milk and in the sin business, you gotta have sinners. Revenue therefore is the kicker for an industry that has a gurantee of profits. That is what Mr. Kehl is saying.

longjohn412

I love these so-called projections and studies

About 100 times more Uncertainty than Global Warming projections yet everyone quotes Economic Model Results as if they were the Word of God ....

The problem with modeling Economics as opposed to scientific based modeling is you have no way to check you model, you can't run a dataset from the past and match the results to the historical facts .... If the result match you've vetted your model, if they don't you tweak the model until it works on past data then you can have a reasonable assurance of it's accuracy with future projections

IN Economics your models are based mostly on CONjecture, hoodoo and voodoo with no way to vet them until after it's already too late and they fail .... The little experiment we started in the late 90's and which crashed HARD in 2008 is a good example .... NOTHING they projected came to be except in a very short term ... and then it was gone

People question Global Warming Models all the time yet they never even bat an eye at the Economic Models, specifically Supply Side Economics Models, despite their long and storied history of being wrong ....

snowman05

I question them every time when Davenport is involved. The bridge, would bring in tourists. The Figgee's new location, would pay for itself. The RME, pay for itself. River center pay for itself. See the great past of these? I know I'm missing some.

This is why when the city says they were set to make boat loads of money on their casino I laughed.

Crusader

None of the three above EVER made any claims that they would be self-sufficient. You are missing something, the truth.

Lindadi

Well, unlike Davenport, they could probably get the job done, whereas Davenport has been fighting over a new one for years now and will probably still be fighting long into the future

longjohn412

Moral of this story

Go Big or go Home .....

Welcome to the discussion.

Keep it Clean. Please avoid obscene, vulgar, lewd, racist or sexually-oriented language.
PLEASE TURN OFF YOUR CAPS LOCK.
Don't Threaten. Threats of harming another person will not be tolerated.
Be Truthful. Don't knowingly lie about anyone or anything.
Be Nice. No racism, sexism or any sort of -ism that is degrading to another person.
Be Proactive. Use the 'Report' link on each comment to let us know of abusive posts.
Share with Us. We'd love to hear eyewitness accounts, the history behind an article.