From MOnewshorizonblog.org

Gaming Companies Make Pitch for License

Photo by g-s-h

By DICK ALDRICH
Missouri News Horizon

JEFFERSON CITY, Mo. – With the state’s last riverboat gaming license on the line, three casino developers made their best pitches to the state’s Gaming Commission as the Commission’s chairman repeated that none may get the license.

Isle of Capri Casino made a pitch for a location on the north side of downtown Cape Girardeau, Paragon Gaming said its site on the east side of Kansas City in the small town of Sugar Creek was best, and a group of St. Louis businessmen pushing for a boat called the Casino Celebration said they could attract significant out-of-state business with their site at the Chain of Rocks Bridge on the very northern edge of the city of St. Louis.

A fourth proposal from a group that wanted to build a casino near the confluence of the Missouri and Mississippi Rivers was not present at the meeting. Late Tuesday, lawyers representing the North St. Louis County group sent a letter to the Gaming Commission saying the group was having trouble securing funding for their proposal.

Gaming Commission Chairman James Mathewson said that meant the Commission would not consider the group for license at this time.

“A deadline’s a deadline, and they missed their deadline for this time,” Mathewson said.

Mathewson said the Commission wasn’t prepared to make a decision on what to do with the group’s $50,000 in earnest money they had fronted to the Commission.

The three groups all made presentations about how their casinos would best serve the state. Steve Gallaway of Gaming Market Advisors, a research firm working with Isle of Capri said the Cape Girardeau site would be best because it would serve an area without other gaming opportunities and attract the most new money to the state.

Gallaway said Kansas City and St. Louis markets are saturated with casinos already and instead of bringing new money into the state, most of the business at casinos in those areas would come from other boats in the same area. He said the Isle of Capri would bring in more than $79 million in revenues and draw business from other parts of Missouri as well as Arkansas, Tennessee, Illinois, Indiana and Kentucky. 

Officials with Paragon Gaming’s proposal for Sugar Creek argued that the Kansas City gaming market wasn’t saturated, but stagnant. They produced numbers that showed with every new improvement to casinos in the Kansas City area, business increased. Paragon would seek to draw visitors from the east side of Kansas City and move the center of gaming away from Kansas.

Paragon’s economist, Jim Oberkirsch, said his numbers showed a $34.5 million expansion in the market once the Sugar Creek casino goes online. He said the operation would turn a little more than $97 million in revenues while taking about $50 million in business from neighboring casinos.

Consultants for the Casino Celebration in St. Louis also disputed Gallaway’s numbers saying they would draw business from across the river in Illinois. Dan Farris told the Commission that St. Louis is the seventh largest gaming market in the country. He said his group seeks to capture only about 10 percent of the St. Louis market, but that figures out to be about $121 million in revenues in the first year.     

The casino would sit just across the Mississippi River from three medium-sized Illinois towns: Granite City, Edwardsville and Alton. With support from Illinois patrons and north St. Louis residents, the Casino Celebration group figures to draw in $83 million in new revenues out of their total, with the rest coming from other nearby casino traffic.

Commission members also seemed interested in the casinos’ locations and their ease of access to major highways. Cape Girardeau City Manager Scott Meyer said he would produce a map for the Commission on the route traffic will take to get to the Isle of Capri casino from Interstate 55. Sugar Creek backers stressed the location’s proximity to Highway 291, while the St. Louis group said its casino would be an eighth of a mile south of I-270.

But when push comes to shove, it’s all going to be about money, and which developer has the best financial plan.

“Our staff and our financial people that we trust are going to dig deep into those financial arrangements,” Mathewson said. “I want to make darn sure if we’re going to issue that 13th license, the financial situation is clear in all five Commissioners’ minds before they vote.”

And if the Commission is not clear on all the financial details, Mathewson said they will not issue a license.

“The law is very clear to me on the 13th license,” Mathewson said. “It says you can’t have more than 13 casinos in the state of Missouri. It doesn’t say you have to have 13.”