JOHNSTON, Iowa — A Council Bluffs gambling boat that's been a fixture on the Missouri River since the mid-1990s will be sold or scrapped following a decision by a state commission Thursday.
The Iowa Racing and Gaming Commission unanimously approved a request from Harrah's Council Bluffs to convert its excursion boat license to a land-based gambling license.
Harrah's estimated that it can save $2.5 million per year by moving casino operations off the river. The boat creates a number of expenses for Harrah's. Dredging around the hull alone costs more than $300,000 per year.
“It's a tremendous amount of money, and it can't be ignored anymore,” Bo Guidry, senior vice president and general manager of Harrah's Council Bluffs, said in an interview.
Though Harrah's plans to hang a for-sale sign on the boat, Guidry said he doubts there will be much of a market for an 18-year-old gambling watercraft. Given that, he thinks the boat will have to be broken up and sold for scrap.
The boat is river-worthy, said Guidry, who is also general manager of the Horseshoe Casino in Council Bluffs. “We keep it in pretty good shape and test the engines every month,” he said. “The boat is still in good working condition.”
No new buildings will be constructed in the $8 million project to create a land-based casino. Instead, Harrah's will gut and remodel its existing convention center space to house the casino.
The company will move its convention center business to the city-owned Mid-America Center, which Caesars Entertainment, the corporation that owns Harrah's and Horseshoe, began managing this summer.
Council Bluffs Mayor Tom Hanafan sees Harrah's plans as positive, both for the casino and for the Mid-America Center, which must compete in a crowded Omaha-area convention center market and has been losing about $700,000 a year in taxpayer money.
“It helps both entities,” Hanafan said. “With the amount of convention space that is available in the metro area, that pushes some of that over to our location. So it will really be a benefit.”
At the commission's Johnston meeting, Guidry said the casino would reduce its number of slot machines to roughly 600 from 800 and boost its table games to 20 from 18.
“We feel that that's the necessary amount of gaming devices that we need to support that facility,” he said.
Commissioner Carl Heinrich of Council Bluffs endorsed the proposal.
“It really is a good plan,” Heinrich said. “They have the facilities to do it and they need to get off the boat.”
Harrah's new land-based casino will be ready sometime this summer, Guidry said.
Harrah's move to dry land is part of a national trend away from riverboat casinos.
Planning is under way to replace the Argosy Casino riverboat, which sits on the Missouri River near downtown Sioux City. Three development groups have offered proposals to build and operate new land-based casinos in the Sioux City area. The commission will select one replacement.
Though expenses are the primary factor driving Harrah's ashore, riverboats generally have more limited space than their land-based counterparts, and offer less flexibility.
“Historically what we've seen is that with the boats there is limited space for a number of things,” said Brian Ohorilko, the commission's administrator. “With the land-based development, they have more opportunity to take advantage of things that make gaming more comfortable.”
Other disadvantages include increased maintenance costs and being more susceptible to nature — floods and droughts can create difficulties for boat operators.
“You have challenges with too much water and you have challenges with not enough water,” Guidry said.
Still, riverboats can be lucrative. Ameristar Casino, about a half-mile south of the Harrah's boat, has no plans to move off the water, said Christie Scott, spokeswoman for the company.
“We're very proud of our boat and the heritage of the riverboat,” she said. “There have been no talks of going land-based. ... We listen to (customers') wants and needs; going land-based is not one of those.”
Ameristar beats out the 14 other non-racetrack casinos in Iowa, with an adjusted gross revenue of $55.4 million so far in fiscal year 2013, which began July 1. Next is the Diamond Jo north of Mason City, with $30.6 million. Harrah's has $22.2 million so far.
In a separate move, the commission unanimously voted to renew the license for Horseshoe and Bluffs Run Greyhound Park.