More than USD 8 billion bet in Iowa in seven months

More than USD 8 billion was wagered at Iowa casinos and on Iowa Lottery games between July 2005 and January 2006.

The gambling industry’s gross revenue during that same seven-month period was more than USD 760 million.

A look at the financial ledgers of the state’s gambling industry as the Iowa Legislature prepares to debate the future of TouchPlay machines shows that the casino industry is raking in more cash, despite the popularity of TouchPlay devices that closely resemble slot machines.

Gamblers left behind USD 645 million at Iowa’s 10 riverboats and three racetrack casinos between July and January, up USD 20 million or about 3 percent compared with a year earlier, according to the Iowa Racing and Gaming Commission. Over the same seven months, the Iowa Lottery’s TouchPlay machines generated revenue of about USD 62 million. Both revenue figures represent the money won from gamblers after cash prizes are paid but before other expenses are deducted from balance sheets.

„Casino income is clearly up, and slot machine revenue in particular is up. I don’t think there is any effect on casino income from the TouchPlay program,“ said Iowa Lottery Vice President Mary Neubauer.

Jack Ketterer, administrator of the Iowa Racing and Gaming Commission, said it’s too early to tell whether TouchPlay machines located in about 2,800 taverns, convenience stores and other sites will have a negative effect on casino revenue.

„We don’t know where they have been installed and when, and how that might affect someplace,“ Ketterer said. He noted that revenue can vary significantly from casino to casino, and sometimes from week to week. „So I think it is pretty hard to draw any conclusions at this point.“

About 6,000 TouchPlay machines have been installed throughout Iowa. An additional 4,500 TouchPlay machines have been ordered and are to be installed in the coming months.

Iowa casino revenue, which totaled USD 1.1 billion last year, is forecast to grow by about USD 200 million annually as four new riverboat casinos open over the next 14 months – and by possibly more as expansion projects are completed at 10 existing casinos. The bottom line could also be bolstered by the addition of casino table games, such as blackjack and craps, at racetracks in Altoona, Council Bluffs and Dubuque.

The Iowa Lottery estimates that TouchPlay revenue will total USD 125 million when the state’s budget year ends June 30, and that TouchPlay revenue will grow to USD 176.5 million the following year. State government is expected to receive USD 30 million from TouchPlay this year, and USD 45 million next year. Excluding TouchPlay, Iowa Lottery sales were up 4.9 percent from July 2005 to January 2006, primarily because of a surge in sales for Powerball and instant ticket games.

Iowa casino lobbyists have complained about TouchPlay machines, contending they pose unfair competition. Casino lobbyists say TouchPlay devices don’t face as tough of regulatory scrutiny as casinos, which have full-time state employees at each site from the Iowa Division of Criminal Investigation and the Iowa Racing and Gaming Commission. Lottery officials say TouchPlay machines are properly regulated, although a state task force has recommended additional safeguards to prevent abuses by minors, gambling addicts and intoxicated people.

Neubauer said the Iowa Lottery’s TouchPlay machines serve a separate clientele than do Iowa’s casinos, which draw more than half of their patrons from Nebraska, Illinois, Wisconsin and other states.

„These are players who are playing TouchPlay machines in their local areas – in their favorite restaurants and bars. I think these are different customers,“ Neubauer said.

Charlie Johnson, a retired tire factory worker from Altoona, said he visits Prairie Meadows daily. He plays slot machines and every type of table game, from blackjack to roulette, but he said he has no plans to try TouchPlay machines.

„The odds of winning there are less than winning here,“ said Johnson, who was at Prairie Meadows last week. TouchPlay machines offer an average payback to customers of about 65 cents for every dollar wagered. Prairie Meadows‘ slot machines offer an average payback of almost 94 cents for every dollar wagered, state records show.

Diane Hamilton of Storm Lake, chairwoman of the Iowa Racing and Gaming Commission, said she’s taking a wait-and-see look at the impact of TouchPlay machines before she makes a decision about issuing additional casino licenses. Commissioner Gerald Bair of Ankeny agreed, saying he feels a responsibility to allow time for new casinos to get up and running and become financially sound before considering requests for more licenses.

Gambling opponents lament the fact that casinos and lottery games have become such a significant factor in the lives of many Iowans. About 8,500 people, mostly Iowans, are employed at riverboats and racetracks, and the Iowa Lottery and casino industry together generated more than USD 400 million last year for government programs and nonprofit groups.

Chuck Hurley, president of the Iowa Family Policy Center, said it was no mistake that the Iowa Legislature declared years ago that gambling is a vice and placed it in the same chapter of state law as prostitution. That terminology remains in effect today in the state code. He said he finds it ironic that casino lobbyists have squabbled this legislative session with TouchPlay lobbyists, remarking, „To me, it is like Madonna calling Britney Spears sleazy.“

Tim Frank, a Spencer businessman who is co-chairman of One Voice Iowa, an anti-gambling group, said Gov. Tom Vilsack has tarnished his legacy as the state’s chief executive by providing poor leadership on gambling issues.

„He is going to leave the state of Iowa with way too much gambling, a terrible dependency on gambling,“ Frank said. „Our Legislature is going to be dependent on it because of the money involved. That is not a good legacy.“

Vilsack aide Jennifer Mullin disagreed, saying the governor’s legacy will be his achievements in education, health care and creating the fastest-growing economy in the Midwest.

„We truly don’t believe that Iowans are going to judge this administration on the expansion of gaming,“ Mullin said.