Market impact studies show the latest proposals for a Cedar Rapids-based casino would again cause “a significant cannibalization impact” meaning a new gaming facility would be taking business from surrounding casinos.

Business “cannibalization” was the biggest reason the Iowa Racing and Gaming Commission rejected a previous Cedar Rapids gaming license proposal, four to one, in 2014 after reviewing similar market studies on a large Cedar Crossing design by the Cedar Rapids Development Group, or CRDG.

This time, commissioners are looking at three bids. Two are coming from CRDG. One of them-- virtually the same proposal as three years prior, a $196 million Cedar Crossing development on the west side of the Cedar River. The other, a smaller Cedar Crossing Central plan that calls for putting a $106 million casino in the core of downtown by replacing a parkade next to the U.S. Cellular Center.

The third option comes from Wild Rose Entertainment, which plans for a smaller “boutique” casino up on First Avenue Southeast, next to the Skogman building. Its plan calls for an estimated construction cost of about $42 million.

The Marquette Advisors study, released to the public Thursday afternoon, showed all three casinos would cannibalize between 45%-56% of their annual revenue from other Iowa facilities. Riverside Casino & Resort losing the most revenue, between $18 million to $22 million.

“Of the $85.0 million in annual revenue projected for the larger Cedar Crossing facility, we estimate that about 55% ($47 million) would be “new” revenue resulting from an increase in gaming activity, with the remaining 45%, or $38 million coming through the cannibalization of business from other casinos,” said the report. “The cannibalization impact for the smaller casino proposals is estimated to range from approximately $29 to $32 million, or about 56% of facility revenues.”

The WhiteSand Gaming study showed even higher percentages of projected cannibalization, 89%-92% of revenue being pulled from nearby casinos. Riverside's facility again feeling the biggest impact, a loss of between $19 million to $27 million.

"Hardest hit would be Riverside, with over 20% of their current revenue at risk to a new operation in Cedar Rapids," said the WhiteSand study. "Waterloo would be affected as well, losing between 5 to 9% of revenue. We spread the effect of the revenue loss in the Dubuque market between the two properties located there with a combined revenue loss of between 3 and 6%."

Jeff Lamberti, IRGC member and former chair during the last proposal, told I9 back in February, historically, if a proposed casino is expected to cut into another casino’s profits by a percentage in the mid-teens the commission would deny the request.

"If the impact on the adjusted gross receipts of the facility was under 10% they generally got a license," said Lamberti. "If it was above the mid teens and certainly 20, 25, 30 they were denied."

Lamberti continued, saying if studies showed a big enough margin of difference, commissioner discretion came into play.

"I may have one study that says the impact is 13% and the other one tells me it's 8%," said Lamberti. "OK, that's where my judgment comes in and says do I think it's closer to this or closer to this."

The WhiteSand report concluded Cedar Rapids may have missed its shot for a downtown facility altogether when voters turned down a 2003 Iowa Racing and Gaming Commission recommendation to authorize gambling in Linn County.

“Linn County voters at that time voted the initiative down," said the report. "Ten years later, in 2013, Linn County voters did approve a referendum to authorize gaming, but in our opinion, the market was saturated by then.”

Cedar Rapids Development Group responded to the market studies, Thursday evening. In its three paragraph statement, CRDG didn't acknowledge the cannibalization numbers but did tout projected "new" revenue for its two proposals saying one of the studies "makes a clear and compelling case for gaming in Cedar Rapids."

"We are pleased Marquette Advisors, who has the most experience in conducting gaming market studies for the state of Iowa, has determined that both Cedar Crossing projects would generate significant new revenue for the state," read the statement. "We are also pleased that in both scenarios, our two Cedar Crossing projects produce more new revenue to the state than our competition’s proposal."

CRDG went on to say it remains "committed to pursuing a gaming license for Linn County.”

Wild Rose Entertainment didn't immediately return a request for comment.

The Iowa Racing and Gaming Commission will discuss the market impact studies later this month. Commissioners will vote on the casino proposals November 16.