Date: January 8, 2025, 09:03h.
Updated on: January 8, 2025, 09:03h.
Two research studies exploring the economic impact of introducing a casino in Cedar Rapids have suggested that Iowa’s commercial gaming sector may have already reached its saturation point.
Last summer, the Iowa Racing and Gaming Commission (IRGC) commissioned two market studies regarding a casino in Cedar Rapids. The city council and Mayor Tiffany O’Donnell are pursuing a state gaming license to enable a local group, known as the Cedar Rapids Development Group, to fund a casino resort on 25 acres of city-owned land west of the Cedar River.
Marquette Advisors from Minneapolis and The Innovation Group from New Orleans were tasked with forecasting the potential revenue of a Cedar Rapids casino and its impact on existing casinos in the state.
The findings were unfavorable for the proposed Cedar Crossing Casino.
Damning Discoveries
Marquette and Innovation estimated that a Cedar Rapids casino would generate gross gaming revenue (GGR) of approximately $118 million and $116.5 million in its first year of operation.
However, Marquette projected that about 60% of that revenue, or $68 million, would come from cannibalizing play at other locations in the state. The Innovation study was slightly more optimistic for the Cedar Crossing team, with around $55.7 million of the revenue sourced from existing Iowa casinos.
Both studies raised concerns about new commercial casinos in eastern Nebraska and Illinois, as well as a tribal resort in Wisconsin, leading to a reduction in the number of Iowa gamblers.
The Innovation Group stated, “The capture by Iowa commercial casinos of the defined gravity model revenue is estimated to decline to 59% after Nebraska is fully developed combined with the full impact of the permanent Hard Rock Rockford and the opening of Ho-Chunk Beloit. Council Bluffs is projected to be hit the hardest, while the northeast is projected to be the hardest hit by the Rockford and Beloit developments.”
Before the introduction of neighboring competition, Iowa’s commercial casinos captured 72% of the available market.
Marquette provided slightly different data but concurred that Iowa’s casino industry is mature and nearing saturation.
“With casinos scattered across the state, the industry is well-established, and most Iowans can easily access one or more casinos within a short drive. Therefore, individual casino markets are relatively saturated. A review of casino player data shows that 63% of Iowa’s adjusted gross revenue comes from customers within a 45-minute drive,” according to Marquette.
Riverside Most Affected
Both studies concluded that the Riverside Casino & Golf Resort would face the most significant impact from a Cedar Rapids gaming venue. Marquette projected a nearly 30% decline in revenue for Riverside, while Innovation predicted a 12% loss.
The IRGC is set to decide on expanding the state’s gaming industry with a 20th casino during its meeting on February 6.