Iowa Casino Profits Decline After Flooding Hits in Spring
Widespread flooding in Iowa contributed to a slight decrease in overall revenue across the state’s 19 casinos over the last fiscal year, according to the Iowa Racing and Gaming Commission.
Best known as a Midwestern state with rolling plains and cornfields, Iowa experienced severe flooding in spring 2019 which led to numerous local evacuations, a ton of road closures and general havoc across the western part of the state.
The flooding was so bad in some areas that Iowa Racing and Gaming Commission administrator Brian Ohorilko said the reported downtick in gross adjusted revenue was clearly due to the torrential downpours.
“The majority of the decline is coming from the west coast,” Ohorilko said.
In total, Iowa’s casino revenue still held its ground compared to last year, totaling nearly $1.457 billion for the 12 months that ended June 30. That’s about half a percent down from the nearly $1.464 billion reported last year.
Casinos in Council Bluffs Take Biggest Hit
Revenue at the three casinos in the Council Bluffs area, one of the most populous regions in Southwest Iowa which also forms part of the Omaha Metropolitan Area, all dipped significantly. That’s because severe Missouri River flooding in that area forced road closures on different parts of Interstate 29, Interstate 680 and the surrounding highways.
Ameristar’s revenue dropped from $170 million to $164 million, Harrah’s Casino went from $73 million to $71 million, and Horseshoe Casino declined from $177 million to $169 million. That’s between a 2.5% and 5% drop at every location in the region.
Additionally, Sioux City’s Hard Rock casino, just over an hour north of the Council Bluffs area, suffered about a 6% drop in revenue, going from $81 million to $76 million.
Higher Revenues at Some Iowa Casinos
Despite the massive amounts of rain, nine of Iowa’s state-licensed casinos still managed to bring in more total adjusted gross revenue during for the fiscal year than during the previous one.
While the bulk of the revenue upticks were relatively small, the big winner in terms of percentage growth over the last fiscal year was Grand Falls in Larchwood at 9%, following by Rhythm City Casino in Davenport at 6.1%, Q Casino in Dubuque at 5.4% and Riverside Casino and Gold Resort at 4.9%.
Meanwhile, Prairie Meadows in Altoona remained the highest-grossing casino in the state by a large margin with over $206.5 million in adjusted gross revenue last year, 2.6% higher than the previous year.
Sports Betting Could Stabilize Iowa Casino Market
Gov. Kim Reynolds signed a bill in May to legalize sports betting both online and at the state’s casinos. State regulators expect to have the infrastructure in place in time for the upcoming football season, so next year’s fiscal year casino earnings could see modest growth.
Plus, widespread mobile betting in the state would help keep bettors online even when they can’t reach a casino, because of weather or any other reason. A number of Iowa’s casinos are near neighboring Nebraska, a state which could have a ballot measure to approve casinos in 2020.
Still, according to Ohorilko, the Iowa casino scene should remain a relatively stable and mature market that won’t get a massive bump in earnings next year but will at least have more customers entering casino doors.
“I don’t necessarily believe that we’ll see significant returns from sports wagering, but I think it will help keep the market stable,” Ohorilko said. “We might see some slight increases on the casino side as well but I think from an admissions standpoint, it will certainly help with admissions and that’s been one piece of the industry that has just continued to decline year over year for quite a number of years and so I think that will be one positive thing that will come out of the sports legislation.”
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