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.