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In economic terms, the three casinos in Council Bluffs are on a bad roll.
For the past three years, the three have reported a decline in gross revenue, or the amount of money lost by gamblers. In fact, they are down 11 percent from the peak figures of 2007.
The recession is primarily to blame, but the growing number of casinos nationwide and in the Midwest is providing stiff competition to Iowa’s casinos.
And people have more and more entertainment options to consider, said Ernie Goss, an economist at Creighton University who studies the gambling industry.
“Entertainment options are just increasing — people have entertainment on their cell phones and entertainment in their homes,” said Goss.
The revenue at the three Bluffs casinos — Ameristar, Harrah’s and Horseshoe — dropped 5.5 percent in the fiscal year ending June 30.
Statewide, casino revenue was down 3.5 percent. Iowa’s 17 state-regulated casinos reported gross gambling revenue of $1.36 billion in the last fiscal year, down from $1.41 billion in the previous year.
It was the first time overall casino revenue dropped in Iowa since 1993 — when Iowa law restricted gamblers to no more than $5 per wager and overall losses of $200. Lawmakers lifted the betting limits in 1994.
Casino industry officials said the economy was a big factor in the recent decline, but this past winter’s stormy weather also had an impact.
“We had some pretty bad snow and ice, and people weren’t getting out of their houses,” said Wes Ehrecke, president of the Iowa Gaming Association, which represents the casinos.
The good news for Iowa casinos is that they have fared much better than the casino hubs of Las Vegas and Atlantic City.
Those gambling meccas, home to what are known in the industry as destination casinos, have experienced double-digit drops in the past couple of years, according to the American Gaming Association.
“Destination casinos are hurting worse than the regional casinos,” said Gary Thompson, a spokesman for Harrah’s.
Regional hubs have fared better because they cater to local markets from within a 90-mile radius.
A Midwestern gambler looking to tighten his belt knows that it costs more to fly to Vegas and stay in a hotel than to jump in the car and drive to a regional casino, Thompson said.
Goss estimated in a 2002 report that about 68 percent of the people who gambled in the three Council Bluffs casinos came from Nebraska, mostly the Omaha metropolitan area.
Casinos are not allowed in Nebraska, where voters have rejected several attempts in the past to approve casino-style gambling. The last attempt, made in 2004, would have allowed casinos across the state.
Goss said the casino industry should not expect a quick turnaround.
Casino revenue in Council Bluffs will return to growth in the future — as the population and income grow in the metro area. But the three casinos’ revenue will not grow as sharply as in the past 10 years, said Goss.
“The growth rate is going to be far, far slower in the future than it is in the past,” Goss said.
Iowa Racing and Gaming Commission Chairman Greg Seyfer said the state may be close to hitting the saturation point.
Goss said a growing number of casinos in the neighboring region continues to eat away at revenue increases in Council Bluffs and across Iowa.
For example, Iowa recently approved a license for a new casino in Lyons County in northwest Iowa. And an additional casino will be opening up soon in the Kansas City area.
In addition, Missouri increased betting limits in its casinos near the Iowa border and made major renovations as they switched from riverboat casinos to land-based casinos.
Gamblers are attracted to the new, said Goss. “Casino-goers are sensitive to the latest and the greatest,” he said.
At the Council Bluffs casinos, the last major renovation was in 2006, when Bluffs Run reopened as the bigger and glitzier Horseshoe.
Ameristar put a $100 million expansion on hold in 2008, citing shaky credit markets. It is still on hold, with no timetable in sight, said Christie Scott, a spokeswoman for Ameristar.
“For us, right now, it has everything to do with the economy.”
This report includes material from the Associated Press.
Contact the writer:
444-1309, robynn.tysver@owh.com
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