Iowa gaming council head sees challenges with Davenport-owned land-based casino


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Originally Posted Online: Dec. 28, 2012, 6:40 pm
Last Updated: Dec. 28, 2012, 7:31 pm
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By Stephen Elliott selliott@qconline.com

A Davenport-controlled land-based casino would require a significant policy change by theIowa Racing and Gaming Commission, its chairman said Friday.

IRGC Chairman Jeff Lamberti said he hoped there will be a new land-based casino in Davenport. However, he said, he struggles at times over whether the city should be in the casino business.

That is a question for the Iowa legislature and the governor, he said.

Davenport wants to buy the Rhythm City Casino from Isle of Capri and move it off the Mississippi River to an undetermined location.

The city has appointed a seven-member nonprofit board — the Davenport Community Improvement Corp. — to direct the casino's operations. Three of the board's members are city officials; two are members of the Riverboat Development Authority which holds the gaming license.

Mr. Lamberti acknowledged Iowa does have a few casinos where the local government is the owner or landlord. The difference for Davenport, he said, is the casino operator would be controlled by a city-appointed board, making it"different than any other facility (in Iowa).

"They (city officials) effectively have control until the debt is paid down," he said. "That is different. I can't predict what that will mean in terms of commission action. That's an individual decision."

Iowa has 21 casinos — 18 of them commercially owned, according to Wes Ehrecke, executive director of the Iowa Gaming Association. That figure does not include three tribal casinos.

Mr. Ehrecke said the combined annual economic impact of Iowa's casinos is about $1 billion and nearly 10,000 jobs. Roughly $84 million is generated for charitable causes, he said.

Regardless of the city's involvement, Mr. Lamberti expects any new casino in Davenport will be off the river.

"I would say it is much more likely than not it (new casino) would go land based," Mr. Lamberti said. He acknowledged the Quad-Cities' casino market is highly competitive and that Jumer's decision to open its new Rock Island hotel and casino on the interstate in 2008 turned heads at the IRGC.

"From the commission's perspective, we also try and keep an eye on what other states are doing, the competitive environment and how is it changing or likely to change," Mr. Lamberti said."Certainly what drove a lot of commission members to move towards a land-based casino in Davenport was the fact that it (Rhythm City) lost a significant amount of market share to Jumer's when it opened its facility."

Rock Island officials expect the city will receive about $6 million in casino revenues this fiscal year. In 2011, the city received approximately $5.6 million from the $85.8 million in revenue reported by Jumer's.

In 2008, before the land-based casino opened, the city received $2.4 million from Jumer's riverboat casino.

Davenport officials plan to attend the IRGC's Jan. 10 meeting, and Mr. Lamberti said the IRGC will be keeping an eye on Rhythm City's economic market share. In the fiscal year for 2011,Rhythm City reported $49.3 million in adjusted gross receipts.

Davenport currently collects about $1.2 million annually from Rhythm City's revenues, said Mayor Bill Gluba, an advocate of a city-owned land-based casino.

"The real issue is what the state is going to say," the mayor said Wednesday.





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