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October 13, 2006

Ah, ha -- I told you so

Saying 'I told you so' isn't really very nice, but ... I told you so.

Eighteen months or so ago, when Davenport officialdom was engaged in its unseemly rush to approve a multi-million dollar package of subsidies for Rhythm City Casino so the casino could move its boat upstream and build a new riverfront hotel, I said Rhythm City was selling pie-in-the-sky. That judgment was based on the casino's claim -- uncritically accepted by a majority of the city council -- that the deal would benefit Davenport through a big increase in gambling revenues.

The new hotel and related improvements would make Rhythm City a 'first-tier' casino and draw patrons from an ever-wider geographic area, or so the deal's backers said.

The skeptics -- me included -- kept asking how that claim made any sense, given that new casinos are springing up in the region like dandelions in April.

Well, the hard numbers are rolling in now and the projections our city fathers accepted with child-like eagerness are now undeniably pie-in-the-sky stuff. Riverside Casino, one of four new Iowa gambling joints that were on the drawing board while Davenport was making its deal with Rhythm City, is now open. The results:

-- Rhythm City's revenue in September was down $455,000 from September 2005. Attendance was down 15,303.

-- The Isle of Capri in Bettendorf saw a drop of $1.1 million in revenue and a decrease of 27,606 in attendance.

The late summer opening of Riverside, south of Iowa City, is just the first of the blows those rosy revenue projections are going to aborb in the next couple of years.

Number two comes in the spring of next year, when a new casino opens in Waterloo. Waterloo is just 140 miles from the Quad-Cities, and my prediction is that a good many people in between who may come to the Quad-Cities to do their gambling now will be going the other direction once that casino opens. Whatever negative impact that has on gambling revenues here is going to be a particularly tough pill for Davenport to swallow since the Waterloo operation is owned by Isle of Capri, the parent corporation of Rhythm City.

Still to come, too, is the new Casino Rock Island. Assuming the plans don't get derailed, the huge new complex at which the Rock Island boat will be a centerpiece is certain to drain off existing customers for the Iowa-side boats in the Quad-Cities plus a good many of whatever new customers may actually come here from a region that's ever more heavily infested with casinos. With a convenient interstate-exit location, the casino/hotel/shopping/movie development will elevate Casino Rock Island from a grungy also-ran operation to the flashy equal of even Isle of Capri's Bettendorf location.

In the meantime, the Diamond Jo Casino in Dubuque, about 90 miles up the river, has announced plans for its own new complex there, and will undoubtedly siphon off more existing and potential Q-C customers.

So where exactly is all that new gambling revenue for Davenport going to come from?

The answer: There isn't going to be any.

Whatever were council members thinking, when they put our on money on the table like country rubes seeing bright lights for the first time?

The answer: They weren't.

Posted by jcb at October 13, 2006 11:44 AM

Comments

You make it sound like competition in the gaming business is a bad thing. The fact is more steeet lights will provide more light. Don't be so quick to count your chickens. Bernie Goldstien didn't get to the postion he holds because he is stupid.

Watch and learn Grasshopper!

Posted by: TheBigDog at October 13, 2006 12:23 PM

I'm thinking "the big dog" should perhaps stay on the porch, because JCB is 100% correct on this one in my opinion.

Reminds me of the classic scene in the Simpson's, when a Phil Hartman voiced character, in a parody of The Music Man, suggests via "The Monorail Song," that Springfield spend their money on a monorail.

Can't you picture them in Davenport???
Marge: [opening a fire extinguisher door in the skywalk to nowhere] Homer, there's a family of possums in here.
Homer: I call the big one "Bitey."

Posted by: Huntooner at October 13, 2006 06:40 PM

TheBigDog -- no one is suggesting that Bernie Goldstein is stupid, or that the Isle of Capri won't do just fine, especially as long as city councils -- Davenport, Bettendorf, Waterloo, etc. -- are willing to toss subsidies at it. But they're not all going to make out: There is a limited supply of suckers out there, even when you toss in aldermen.

Posted by: jcb at October 13, 2006 07:14 PM

That's what the "naysayes" told Bugsy when he built the first CASINOS in the sand. But people kept coming and coming! Today Las vegas is one of the fastest growing cities in the world. Goldstien is a man of ambition and vision. asions.

Anyone can watch The Simpsons, but it takes leadereship to build high speed rail. As much money as the cities and local communities agrner from the Iowa Casions, a few dollars back isn't going to wreck the world. Look back at the CASINOS first projections, they have far out done anything anyone ever imagined.

Posted by: TheBigDog at October 13, 2006 07:43 PM

I remember when the old President opened 15 years ago, the casino supporters said riverboat gambling would make the Quad Cities a visitor's destination, that people would come from Chicago and Minneapolis to gamble on Quad City boats. How many people come from Chicago and Minneapolis to gamble in the Quad Cities today? And didn't the casino people tell us the Kahl Building going to become Branson North? That was patently absurd from the start, which was quickly revealed when something like eight people bought tickets to a Reba McEntire concert (and I give the lady credit, she performed for 'em, anyway--but then, what else was she going to do? Gamble?). My point here is that when it comes to promises from gambling companies, it's best to not believe them.

Posted by: crapped out at October 17, 2006 02:49 PM