The Marquette Advisors and WhiteSand Gaming studies

Iowa gambling authorities assess cannibalization risks

The Marquette Advisors study showed all three casinos would cannibalize between 45%-56% of their annual revenue from other Iowa facilities.

United States 
| 12/10/2017

Facing the potential opening of a casino in the city of Cedar Rapids, members of the Iowa Racing and Gaming Commission today began to review two market studies assessing the impact the project could have on the state's casino market. Currently, there are three proposals for the development that threaten to cannibalize revenue from nearby gaming facilities.

According to KCRG, Iowa’s five-member Racing and Gaming Commission was hearing a summary of both impact studies from the two companies that created them.

The Marquette Advisors study showed all three casinos would cannibalize between 45%-56% of their annual revenue from other Iowa facilities. Riverside Casino & Resort losing the most revenue, between $18 million to $22 million, which equates to about 20% of its yearly income.

“Of the $85.0 million in annual revenue projected for the larger Cedar Crossing facility, we estimate that about 55% ($47 million) would be “new” revenue resulting from an increase in gaming activity, with the remaining 45%, or $38 million coming through the cannibalization of business from other casinos,” the report said.

“The cannibalization impact for the smaller casino proposals is estimated to range from approximately $29 to $32 million, or about 56% of facility revenues”

The other study from WhiteSand Gaming, a group the commission is using for the first time, showed even higher percentages of projected cannibalization, 89%-92% of revenue being pulled from nearby casinos. Riverside's facility again feeling the biggest impact, a loss of between $19 million to $27 million.

"Hardest hit would be Riverside, with over 20% of their current revenue at risk to a new operation in Cedar Rapids," said the WhiteSand study.

"Waterloo would be affected as well, losing between 5 to 9% of revenue. We spread the effect of the revenue loss in the Dubuque market between the two properties located there with a combined revenue loss of between 3 and 6%."

 

Yogonet.com

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