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Casinos see first revenue dip in Bluffs
(Omaha World-Herald (NE) (KRT) Via Acquire Media NewsEdge) Jul. 20--COUNCIL BLUFFS -- After a string of lucky sevens, the Council Bluffs casinos rolled snake eyes over the past year.
Gross gambling revenue during the past 12 months dropped for the first time ever for the three casinos. Combined revenue always had grown since the casinos opened a dozen years ago.
The Horseshoe and Harrah's Casinos blame the shaky economy and soaring gas prices for the revenue declines. But casino revenue in Iowa as a whole increased.
A local gambling expert wonders whether the Bluffs casinos might be losing gamblers to new and revamped casinos in other parts of Iowa and elsewhere.
The Horseshoe, Ameristar and Harrah's Casinos reported total gambling revenue of $474.29 million in the 2007-08 fiscal year, which ended June 30.
That was a 1.3 percent drop from the $480.33 million in revenue collected during the 2006-07 fiscal year. The figures were released last week by the Iowa Racing and Gaming Commission.
"We have not been immune to the economy; more specifically, high gas prices have impacted our regional visits over the last year," Horseshoe and Harrah's spokeswoman Katie Hansen said in a statement.
Both casinos are run by Harrah's Entertainment Inc.
Hansen, however, declined to comment on why other major Iowa casinos, and casinos overall in the state, had higher revenue.
"We don't really look at what other casinos might be doing throughout the state," Hansen said, adding that the Horseshoe had a better first half for 2008 than last year.
Ameristar did not respond to requests for comment on the latest revenue figures. However, an Ameristar report released in May said the company was delaying a planned expansion of the casino, citing uncertainty in the credit markets. A $100 million project had been announced last year.
Each of the three Bluffs casinos had falling revenue. But the Horseshoe remained No. 1 in the state for revenue, followed by Prairie Meadows in Des Moines. Next came the Ameristar and Harrah's Casinos.
Prairie Meadows and the No. 5 casino for revenue, Isle of Capri Bettendorf, increased their gambling takes over last year, by 2.2 percent and 5.7 percent, respectively.
Before the decline, the worst year for the Bluffs casinos was a 0.7 percent revenue increase in 2000-01, when the economy was weakening.
Gross gambling revenue for all Iowa casinos increased by more than $95 million, or 7 percent, this past year. But most of that increase was from the new Isle casino in Waterloo. Total state revenue growth would have been slight without it.
Excluding the three Bluffs casinos, however, the rest of the state's casinos increased their revenue by a total of 12 percent.
Nationally, commercial casino gambling revenue was down 1.3 percent from January through April 2008, compared with the same four months last year. That's according to the latest figures from the American Gaming Association.
"The economy is having an impact," said association spokesman Brian Lehman. "We are impacted just as any other consumer-driven industry would be."
Smoking bans and increased gambling competition could also be behind casino revenue declines in some states, Lehman said. Iowa's new smoking ban, which took effect July 1, does not apply to gambling floors.
To boost revenue, the Bluffs' Horseshoe and Harrah's Casinos "plan to aggressively target our feeder markets including Kansas City and Des Moines," Hansen said.
But Ernie Goss, a Creighton University economist who studies gambling, said regional competition makes it increasingly difficult to draw gamblers from other markets.
Expanded casinos have opened in recent years in central and northern Iowa, such as the Waterloo casino and the Wild Rose Casino in Emmetsburg.
Also, Goss said, a large casino is planned for Kansas City, Kan., and Missouri may get rid of its gambler loss limits this fall -- eliminating a reason for Missouri residents to come to Iowa casinos, which have no loss limits.
"First of all, the pie is not growing as fast as it was," Goss said. "Second, you're dividing it up more among the casinos. . . . It's much more competitive. (Casinos) used to be more isolated."
Admissions for the three Bluffs casinos fell sharply in the past year. They were down a combined 13 percent -- from 8.03 million visitors to 6.97 million.
Revenue at the casinos, however, did not drop that dramatically, meaning more money was lost per gambler in the past 12 months than the previous period. For example, each visitor to the Horseshoe lost an average of $73 in the most recent fiscal year, compared with $62 per gambler the year before.
Hansen declined to say whether the casino was targeting high-rollers for added revenue, but she did say the casino is "bringing in good players from around the country" and has a variety of gambling options for all players.
Admissions at all Iowa casinos dropped, as well, if the figures for the new Waterloo casino are excluded.
Wes Ehrecke, president of the Iowa Gaming Association, said the region's bad weather over the past several months may have kept some people away from the casinos. But the economy is a big factor, he said, and the uncertainty could extend into the current fiscal year.
"We're not going to see the double-digit growth we've had in the past," Ehrecke said, adding: "When the economy tightens, it will have its impact. People are focusing more on their priority expenditures, as they should."
--Contact the writer: 444-1149, tom.shaw@owh.com
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