FromDC2Iowa: Riverside Gambling Casino's Future II (Nov. 2006)

Monday, November 13, 2006

Riverside Gambling Casino's Future II (Nov. 2006)

Iowa law requires its gambling casinos to report quite an array of data on a monthly basis. The Riverside gambling casino's first report was for the last weekend in August and the month of September. Nicholas Johnson, "Riverside Gambling Casino's Future," October 12, 2006.

Notwithstanding that this was the casino's opening month (normally a high attendance time), the casino was unable to make its projected monthly visits. As the blog reported,

"Moreover, this September was unusual for other reasons. It had five rather than four weekends. It had three Hawkeye home football games. . . . On top of that, they later had an opening entertainment headliner-superstar, Jay Leno, on one of those football Saturdays. He not only brought in a crowd that day, but gave the place a luster for a few days before and after (that will rapidly fade unless the casino is willing and able to bring in comparable stars on a fairly regular basis.)

"In short, the survival of entertainment venues depends, not on how they open, but on what they do thereafter to keep from closing. Thus, without more (and there will be more once the golf course opens) one would expect the Riverside gambling casino's attendance numbers to have a significant drop in the months and years to come."

The expectation has proved out.

As Bradley Franzwa reports:

"The Riverside Casino Resort saw a 20% drop in attendance in the second month it was open (from 122,655 in September to 98,280 in October).

"From the Press Citizen story: Before the casino and resort opened, its officials estimated 1.6 million visitors a year. That's more than 133,000 visitors a month, if divided evenly -- a number they did not reach from Aug. 31 to Sept. 30. . . .'

" Projecting out the next 10 months, even if the casino could stop the bleeding and maintain the same attendance over the next 10 months, then the casino attendance projections will only be off 25%. (1.2 million visitors instead of the 1.6 million projected visitors).

"As Mr. Kehl stated in the article, revenue is more important than attendance. The same Commission report shows that revenue also decreased 14% in a single month, from $7,439,411 in September to $6,428,909 in September.

"Projecting out the next 10 months, even if the casino could stop the bleeding and maintain the same revenue over the next 10 months, then the casino revenue projections will only be off 6%. ($78 million in annual revenue instead of the anticipated $83 million). And weÂ’re just coming into the months in which most casino revenue really drops off."

October had advantages for the casino over the months to come. There were still two Hawkeye home games (Purdue and Northern Illinois) to bring gamblers into the casion-football program partnership (i.e., transportation to and from the casino, box seats at the games, advertising of the casino to 70,000 fans). There were many days of good weather. And the casino was, presumably, still enjoying some of the attraction of any newly opened facility.

Notwithstanding these advantages, based on October attendance projected attendance for the first year will be down 25% from early predictions/projections, and revenue, down 14% in one month, will be down 6% for the year.

And these projections assume October's numbers can be held over the next 10 months, which seems unlikely. When there's nothing to bring tens of thousands of visitors to Iowa City -- when, indeed, during the winter break tens of thousands of Iowa City college students will have left town -- when there's snow on the ground and ice on the roads, it seems unlikely that the casino will be able to maintain October's numbers. We'll see.

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Monday, November 13, 2006

Riverside Gambling Casino's Future II (Nov. 2006)

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