The potential opening of a casino in the city of Cedar Rapids, Iowa could impact the state’s casino market quite negatively as the new venue would cannibalize revenue from existing gaming properties, according to two recently published reports.
The Iowa Racing and Gaming Commission is currently considering three proposals for a casino in the city and is hearing opinions from supporters and opponents of the possibility for the addition of a new gambling venue to the state’s market.
Back in 2014, the gambling regulator rejected a proposal for a Cedar Rapids casino submitted by developer Cedar Rapids Development Group mainly due to cannibalization concerns. Higher cannibalization figures may once again upset the applecart for the casino expansion push.
What the Reports Say
The two reports were compiled absolutely separately from one another and while both showed that cannibalization would probably occur if a Cedar Rapids casino is constructed, they differed in the scale of that cannibalization.
Here it is important to note that three proposals have been submitted to the Iowa Racing and Gaming Commission – Wild Rose Cedar Rapids, Cedar Crossing Central, and Cedar Crossing on the River.
As for the studies, they were comprised by Minneapolis-based Marquette Advisors and by Atlantic City-based WhiteSand Gaming.
According to figures presented by Marquette Advisors, Wild Rose Cedar Rapids could generate annual revenue of around $23 million, 56% of which would represent revenue cannibalized from existing nearby casinos. Cedar Crossing Central is expected to generate the amount of $25 million and to cannibalize 56% of the existing casino market. Last but not least, Cedar Crossing on the River is forecast to produce $47 million in revenue, of which 45% would be cannibalized from existing gambling venues.
According to WhiteSand Gaming’s predictions, a new casino in Cedar Rapids would have a much bigger negative impact on the local market. The research firm pointed out that none of the three casino projects, if realized, would be able to generate revenue of more than $7 million and that more than 89% of that revenue would be cannibalized from neighboring gambling venues.
Concerning cannibalization figures as well as the overall state of Iowa’s market were among the leading reasons for the Racing and Gaming Commission’s decision to nix the 2014 casino proposal. Owners of existing casinos and other involved parties have urged the regulator to reject the three new projects, as well. Commission members are to hear from concerned parties at a hearing that is slated to be held next Thursday.
More Details about the Three Casino Proposals
As mentioned above, there are three proposals for the construction of a casino in the Cedar Rapids area. All three projects involve multi-million-dollar developments that are hoped to attract casino customers from all around the state and other parts of the US. And all three of them have seen great opposition from existing casino operators.
Wild Rose Cedar Rapids is backed by Wild Rose Entertainment, a developer led by businessman Gary Kirke. The casino is planned to be built on Cedar Rapid’s First Avenue. Its construction is expected to cost between $40 million and $55 million. The establishment has been described by its developer as a boutique one.
Cedar Rapids Development Group has this year come up with two separate proposals. Cedar Crossing Central would be located right next to DoubleTree Hotel and the US Cellular Center to form a whole new gaming, accommodation, and entertainment complex. The property would cost anywhere between $105 million and $118 million.
Last but not least, the previously failed Cedar Crossing on the River would be located on First Street. The new project is actually almost the same as its rejected predecessor. It has been put a price tag of between $165 million and $187 million.
