Iowa Casinos See Revenue Decline as Sports Betting Breaks Records+

Iowa’s state-regulated casinos have experienced slight dips in both revenue and attendance for the second consecutive year, according to data from the Iowa Racing and Gaming Commission. However, legal sports betting has reached record heights, suggesting a shift in gambling trends across the state.

In fiscal year 2024, gross adjusted receipts from the state’s 19 casinos, excluding sports betting, reached $1.72 billion, down from $1.76 billion in 2023 and $1.77 billion in 2022, which marked an all-time high. Despite the decline, 2024’s revenue still exceeds pre-pandemic levels of roughly $1.46 billion in 2018 and 2019. Daily averages equated to nearly $4.7 million in casino revenue across the state.

Attendance figures have followed a similar downward trajectory. After rebounding to 17.5 million visitors in fiscal 2022, issions fell to 17.1 million in 2023 and 16.9 million in 2024. While these trends show regression, experts believe they reflect a return to pre-pandemic norms rather than cause for alarm.

Analyzing the Decline in Casino Revenue

Tina Eick, of the Iowa Racing and Gaming Commission, views the decline as a market correction. “When we look at fiscal year 2022, that’s a great year. In fact, it’s an all-time, record-breaking year,” she said. “We are seeing maybe more of a rightsizing or reversion to the market that we were seeing before.”

Competition from Nebraska’s newly established gaming market is cited as a contributing factor. The Horseshoe Casino in Council Bluffs, located near the Nebraska border, has seen the largest revenue drop among Iowa’s casinos. Its adjusted gross revenue decreased from $212 million in 2022 to $205 million in 2023, and further to $187 million in 2024.

Economic factors, such as inflation and rising living costs, have also likely impacted casino attendance, according to Wes Ehrecke, president and CEO of the Iowa Gaming Association. “Certainly all those [basic costs] increased during that time, so people tighten their belts more,” he noted.

Sports Betting Hits a New High

In contrast, sports betting in Iowa has surged. Fiscal 2024 saw a record-breaking $2.6 billion in sports wagers, exceeding the $2.5 billion recorded in 2022. This translates to over $7 million wagered daily.

This upward trend highlights the growing appeal of sports betting, even as overall casino revenues plateau. Industry analysts suggest that the accessibility of sports betting platforms and increasing consumer interest in this sector are driving the rise.

The potential addition of a new casino in Cedar Rapids could further complicate Iowa’s gaming landscape. A $275 million project proposed by Peninsula Pacific Entertainment and the Linn County Gaming Association aims to create a casino on Cedar Rapids’ northwest side.

However, opponents warn that Iowa’s gaming market is already saturated. During a public comment meeting in November, representatives from casinos in neighboring areas expressed concerns about revenue cannibalization. Studies commissioned by the Iowa Racing and Gaming Commission on the market impact of a new casino are expected in December, with findings to be discussed in January.

Eick anticipates these studies will play a crucial role in the commission’s decision. “I anticipate that those may be some of the questions that they get asked from the commissioners, as far as, ‘What trends do you see? What impact do you see?’” she said.

While Iowa’s casinos have seen modest declines, experts stress that the industry remains robust. With revenue levels above pre-pandemic figures and sports betting breaking new records, the state’s gambling market appears to be recalibrating rather than faltering. The coming months will reveal how these shifts influence decisions on new developments like the Cedar Rapids casino.

Source:

”Iowa’s casino attendance, revenue dip again in October; sports betting sets record”, cdcgaming.com, December 01, 2024.