Decision on licenses looms

David Pitt

Tuesday, April 12, 2005 | 9:38 a.m.

DES MOINES, Iowa -- The state's gambling commissioners must have felt like celebrities as they traversed the state last week to look at potential casino sites.

They were greeted with scores of people applauding them at each location, offered strawberry pie in Worth County, Hawaiian leis in Waterloo and a buffet in Ottumwa.

Commissioners generally declined offers of trinkets and food and intently listened to closely timed 45-minute presentations. Most were quick reviews of the projects and tours of the potential casino sites.

They met face to face with people very passionate about the economic boost that could come from the influx of millions of dollars a casino would bring to their city.

It all makes the process of picking winners and losers more difficult, said Diane Hamilton, chairwoman of the Iowa Racing and Gaming Commission.

"They all have different components that make them different and special and I think the decision is going to be even tougher than what we anticipated," she said.

Commissioner Joyce Jardine agreed.

"They've all worked so hard together and they're so enthused and really making a lot of plans for their future," she said. "It will be very difficult. I'm sure some will be disappointed and I'm sure we're not all going to agree on who they should be."

The commissioners toured 10 prospective sites in seven cities Wednesday and Thursday. They attended brief receptions in a ballroom, a car dealer's showroom and beneath several tents.

They were met by a high school jazz band in Fort Dodge, loud calypso music and grass skirt-wearing casino workers at one Waterloo site and a kilt-adorned bagpipe player in Emmetsburg.

In Riverside and at one Emmetsburg site commissioners looked over flat freshly tilled farm fields marked with wooden stakes marking the possible casino perimeter. In Fort Dodge, Waterloo and Ottumwa, sites were along riverbanks, where supporters said a casino would help spur other development and revitalize deteriorating business districts.

"Everybody believes there is a need in their particular area," said Commissioner Mike Mahaffey. "I don't think we're going to end up giving 10 licenses. How many are we going to give? I don't know."

He equated the decision to a business hiring a new employee.

"Many times you end up with more than one person that could do the job, more than one person that you would like to hire but you've got to narrow it down and that's just what we're going to have to do," he said.

Mahaffey said Waterloo has a good chance of getting a license because of its location away from existing casinos and the size of the project. Estimates indicate a casino there would generate as much as $100 million in annual revenue.

With three projects proposed -- one at the riverfront, one at the former dog racing track and another next to a water park -- commissioners will have the task of eliminating two.

The only other location with multiple projects is Emmetsburg. One group wants the casino on Five Island Lake to boost recreational activities there, while the other wants the casino away from the lake to preserve its natural scenery.

One of the deciding factors for commissioners will be the effect a new casino will have on existing gambling operations. The projects that would take the most customers from another would be less likely to succeed.

Gerald Bair, a former Department of Revenue and Finance director, is considered the financial expert among the five commissioners.

Important factors include financial backing and whether it comes from Iowans or outside sources. He will also focus on whether projects use Iowa labor and supplies and much of the money spent at the casino stays in the state.

Some of the same concerns will help Jardine decide.

"I'm always interested in Iowa involvement and what comes back and what stays in Iowa," she said.

Bair also said he wants to make sure casino operators have integrity.

"The last thing we need in the industry is unscrupulous people," he said.

On April 20, the commissioners will meet in private with agents of the Iowa Division of Criminal Investigation, who have spent weeks researching the backgrounds of people involved in the proposed casino projects.

Commissioners can consider criminal records and other background information when making their decision on licenses, said Jack Ketterer, the gambling commission's administrator.

A public hearing will be held May 4 and the commissioners will have an opportunity to question the applicants. The commission is expected to announce then the number of licenses it plans to approve.

The winners will be announced at the May 11 meeting.

"People ask how are you going to make this decision," Mahaffey said. "The answer is we're just going to do the best that we can."