By Dan Johnson
Prairie Meadows Racetrack & Casino is opposing a proposed casino in Jefferson, Iowa, that it estimates would reduce its gaming revenue by nearly $13 million.
The Prairie Meadows board of directors voted unanimously March 19 to oppose granting a license to Wild Rose Entertainment for a $40 million casino with 525 slot machines, 14 table games, and 65 hotel rooms.
The proposed casino would be about 75 miles northwest of Prairie Meadows on Highway 30. It is one of two license applications before the Iowa Racing and Gaming Commission, along with a request for a Cedar Rapids casino in east central Iowa.
The commission had two studies done, and each said both casinos would derive the majority of their business from patrons currently going to other casinos.
Marquette Advisors estimated that Wild Rose would draw $28 million in annual revenue, with $22 million of that taken from other casinos, including $6 million from Prairie Meadows. Union Gaming Analytics projected that Prairie Meadows would lose $10 million to $15 million to the Jefferson casino.
Prairie Meadows' own estimate is that its casino revenue would drop by $12.8 million.
"It's very significant," Prairie Meadows chief executive officer Gary Palmer said. "It's 8% (of revenue), and that's charitable. Horse (racing) purses would drop. Both of these studies have shown that our market is not under-served. There's not an under-served county in the state. More just makes it worse and worse."
A $13 million drop would cut purses by $1.4 million since they receive 11% of casino revenue.
It could also impact the amount Prairie Meadows, which is not-for-profit, gives to charity and governments. Polk County receives $26 million in rent and revenue-sharing, while $4 million goes to the city of Des Moines and $5.5 million to charities.
Prairie Meadows is in the midst of a $70-million expansion project that follows adding a 168-room hotel.
"The bottom line is the expansion of gaming is a very critical issue to Prairie Meadows, as well as the horsemen," said Jack Peters, chairman of the Prairie Meadows board of directors. "Based on the commitment we've made in the millions of dollars we've spent to expand our facility here, in all fairness, we think we need a moratorium on the addition of more gaming."
The Iowa Horsemen's Benevolent and Protective Association and Polk County officials have also opposed the Jefferson application.
"Whether it is $6 million, $10 million, $13 million or whatever, all the good you've created—the revenue-sharing to governments, the distribution to grants—is going to be impacted," Michael O'Meara, assistant Polk County attorney, told the Prairie Meadows board. "So, we urge you to stand firm, and we are willing to work with you."