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Western Iowa casinos predicted to lose significant revenue from Nebraska competition

AP Photo/Nati Harnik
AP file
The Ponca Tribe's Prairie Flower Casino in Carter Lake, Iowa, near the Nebraska border.

Nebraska’s plans to construct casinos along Iowa’s western border could lead to a significant loss in revenue for Iowa’s gaming industry.

A recent socioeconomic analysis by the Spectrum Gaming Group predicts major losses in revenue for the state by 2025. The study anticipates casinos in Council Bluffs and Sioux City will face stiff competition from incoming casinos being constructed across the border in Omaha and South Sioux City.

Council Bluffs casinos are the most at-risk, with 80 percent of their gaming revenue coming from Nebraska residents. The study expects the Iowa city’s three casinos could lose 45 percent of their market to the soon-to-come Omaha competition by 2025.

Director of gaming at the Iowa Racing and Gaming Commission Brian Ohorilko said although he’s not surprised at the projected losses, the numbers are higher than operators anticipated a year ago.

“The Council Bluffs market is the largest market in the state and so there will be a significant impact. The Iowa casinos will need to prepare for and do everything they can to put their best foot forward,” Ohorilko said.

Sioux City’s Hard Rock Casino is also projected to lose significant revenue to competition. While the casino could retain 60 percent of its market, the study estimates a loss of around $35 million within three years after the Nebraska casino opens up in South Sioux City.

Spectrum Gaming Group predicts Iowa casinos will face a significant impact from casinos opening across the border in Nebraska.
IRGC, Spectrum Gaming Group
Spectrum Gaming Group predicts Iowa casinos will face a significant impact from casinos opening across the border in Nebraska.

Iowa’s gaming industry saw record highs in 2021. Iowa casinos generated over $1.5 billion dollars in revenue last fiscal year, equating to about $330 million in state and county taxes.

Ernie Goss, a professor of economics at Creighton University, said the cannibalization of these casinos will greatly impact the state’s tax collections in the years to come. He said the diminished tax collections could impact funding of public libraries and schools in places like Council Bluffs.

“You're going to see revenues pull from Iowa residents,” Goss said. “And that's money that would have been in the state of Iowa and tax collections that would have been collected in Iowa, that now will be going to Nebraska. It’s going to have some negative impacts on the state of Iowa.”

Nebraska residents voted last year to legalize casino gambling at the state’s horse tracks. All six of the state’s tracks are expected to apply for casino approvals. Some operations could begin as soon as 2023.

Goss said he expects competition to continue to crop up around Iowa’s borders. Each of Iowa’s 19 casinos should prepare for a battle over casino dollars, he said.

“There’s just heavy competition, even among the state casinos. This is just going to make that competition even more significant.”

Kendall was Iowa Public Radio’s western Iowa reporter based in Sioux City, IA until Jan. 20, 2023.