Osceola riverboat thriving since opening

Saturday, Feb. 12, 2000 | 9:58 a.m.

Lakeside Casino Resort was off to a hot start in January, drawing 124,000 customers who left behind $4.7 million in gambling losses, state records show.

If gamblers continue heading to Osceola's West Lake at the same pace in the months ahead, the floating casino would finish this year with nearly 1.5 million patrons and gambling revenues of about $57 million. That would be far above original projections of nearly 1 million customers per year and about $40 million in casino revenues.

"Obviously, we are pleased with the performance for the first month," said Joe Massa, general manager of Lakeside Casino Resort. "I don't necessarily know if you can make projections based on the first month, but it has been encouraging. February has also been good. The thing you worry the most about every weekend now is the weather."

Lakeside Casino Resort, built at a cost of $50 million, opened on New Year's Day. The business includes a gambling vessel, convention center, restaurants and a hotel. The owner is privately held Southern Iowa Gaming Co., headed by William Grace of St. Joseph, Mo.

Operators of Prairie Meadows Racetrack and Casino in Altoona were concerned that the Osceola casino, about an hour away, would hurt Prairie Meadows.

Prairie Meadows drew 215,000 patrons last month, down 6 percent from January 1999. Those gamblers lost nearly $11 million, up 2.6 percent from a year ago, according to reports filed with the Iowa Racing and Gaming Commission.

Robert Farinella, Prairie Meadows' general manager, said the January financial reports appear to be a good sign for both the Osceola and Altoona casinos. Both businesses are competing for customers in central Iowa, but Farinella feels confident.

"It is too early to tell what the overall impact will be. But the fact is that their revenues are apparently well ahead of their plan," Farinella said. "The fact is also that our revenues have held, despite the fact that during an opening month everybody wants to see the new kid on the block."

Although the Osceola casino has been advertising heavily with Des Moines-area media, Farinella said Prairie Meadows doesn't intend to change its marketing strategy.

Terry Hirsch, director of riverboat gambling for the Iowa Racing and Gaming Commission, said February's financial figures for the Lakeside casino may provide a better indication of how the business will perform over the longer term.

January is typically one of the slowest months in Iowa's casino industry, Hirsch noted. The summer months are the busiest.

The Lakeside casino has 850 slot machines, plus 40 table games, such as craps and blackjack. During January, slot machines provided 82 percent of the casino's gross gambling revenues, while table games generated 18 percent, state records show. The average gambler lost $38 per visit. The slot machines had an average payback to gamblers of nearly 94 percent for every dollar wagered.

Business has been so strong at the Lakeside casino that extra employees have been hired. The Osceola complex had intended to employ 720 full- and part-time workers.

The facility now has 810 staff members.

James Schipper, an Osceola banker who helped to lead community support for establishing the casino, said he is thrilled by Lakeside's solid start.

"If they can sustain that kind of traffic, it will be hugely successful and positive for the community," he said.

Fears of a labor shortage among traditional industrial employers in Osceola haven't materialized, Schipper added. "There has been some movement within the work force, but probably not even as much as some may have expected."