If anyone asks, Catfish Bend Casino in Iowa does not want any new competition. It has enough without it. But a new casino in Cedar Rapids is possible.
In November 2021, voters in Linn County, Iowa, voted to allow a casino to be built in Cedar Rapids. But in 2022, lawmakers in Iowa passed a moratorium on new casino licenses. That moratorium expired at the end of last month, but Iowa Representative Bobby Kaufman is promising to introduce legislation again staving off Cedar Rapids’s attempt to gain a casino. However, a proposal has already been put forward.
Peninsula Pacific Entertainment and a local investment group have already secured the city’s approval for a proposed $250 million casino. The Iowa Racing and Gaming Commission is scheduled to rule on a Cedar Rapids casino in February 2025. On the surface, the issue is simple: Cedar Rapids wants a casino and state law permits the city to have one. Beneath the surface, the issue is not simple; unlike other states, Iowa has shown a concern for existing casinos and has been unwilling to approve a license if the Gaming Commission believes a new casino would harm existing ones. A license for Cedar Rapids was denied in 2014 and 2017. The reason given for denying the license both times was the potential impact on other casinos.
To vet the issue anew, the state Gaming Commission is seeking a vendor to conduct a market study to determine what effect a casino in Cedar Rapids would have on other casinos in the state. In 2022, a study concluded that Iowa’s casinos were being threatened by casinos in Nebraska and other nearby states. The situation in Nebraska made it difficult to assess the impact of new casinos in Iowa. Lawmakers thought it best to postpone the issue for two years.
The two years have passed. A new moratorium is being proposed and a study ordered. The new market study will be in the midst of a very confusing post-pandemic gaming economy. In testimony before a commission that disperses casino revenue within the region, the general manager of Catfish Bend spoke. Rob Higgins told the commission that his business was down and trends have been inconsistent. Since 2019, like the rest of the country, Burlington and Catfish Bend have been on a roller coaster.
In fiscal-year 2019, Catfish Bend generated $39.6 million in GGR. In 2020 in the wake of the national shutdown Catfish Bend generated $32.1 million. Revenue rose to $43.3 million in 2021 and $45.2 million in 2022. Revenue has fallen slightly each year since. Higgins struggled to explain the trend; he thought maybe the coming presidential election was causing people to hold on to their money. An interesting theory, or one might say straw.
That theory is one of dozens of theories being put forth to explain casino revenues and profits since 2020. In general, the nation followed the same path as Catfish Bend. Revenues dropped drastically in 2020. The industry was shut down for several months that year, with some states remaining on lockdown for six months or more. However, in 2021, revenues bounced back; the bounce was so strong it startled industry insiders and observers alike. There did not seem to be one explanation.
Several theories have been proposed. First was cabin fever. People were so glad to get back out in public that they spent with abandon. Also, consumers and gamblers were said to be flush with cash from a forced curtailing of spending and government-assistance checks. Those explanations ceased to be applicable in late 2021 and through 2022. Yet the spending continued. A more current set of theories postulates a reduction in savings and an increase in consumer debt. Neither work on closer examination of the data. Especially in light of inflation, the trend was hard to understand. But not to worry.
Before we got tired of trying to explain the trend, it ended. On a same-store basis, casino revenue nationally has mirrored that of Catfish Bend. Even more significantly, casino profits followed a similar trendline. Inflation, a labor shortage, and fewer customers have hit most casinos. Catfish Bend, for example, hit its lowest per-customer win in 2024, down 8.5 percent from 2022. That trend has also been noted in other jurisdictions that track the number of customers — fewer customers spending less per visit. The post-pandemic period is beginning to look more like an economic bubble and not a trend. For whatever reason, revenues exploded after the lockdown. Since then, revenues have peaked, leveled off, and begun to decline.
The national gaming GGR is marching to other drummers: dramatic growth in igaming, online sports betting, new casinos, and more VLTs. Minus those exceptions, the gaming industry is just another Catfish Bend.
