Payroll tax hike hurting casino revenue

Declining take-home pay, gambling machines in Illinois bars and financial uncertainty at the federal level were among the factors to hurt business at the Wild Rose Casino and Resort last month, according to general manager Tim Bollmann.

The casino’s revenue was $2.6 million in January, a 6 percent decrease when compared to revenues from January a year prior. Wild Roses’s January attendance was 45,643, down 7.9 percent from the same period in 2012.

Bollmann shared the figures with the Clinton County Development Association on Wednesday. Each month the Iowa Racing and Gaming Commission publishes revenue reports that detail admission, money spent and revenues from each of Iowa’s casinos and racing tracks.

In January, table games generated $111,738 for the casino. Slot machines brought in $2.5 million, the lion’s share of casino revenue. These revenues are down 39 percent and 8 percent compared to last January, respectively.

Bollmann cited the payroll tax holiday expiration, which left potential customers with smaller paychecks. Rising gas prices as well as concern about the federal sequester that will result in $1.2 trillion in spending cuts also contribute to declining revenues, he said.

The Wild Rose was not alone in its January losses. In total, the 18 commercial casinos in Iowa were down by $7 million. In the eastern Iowa region, only Dubuque- based Mystique saw an increase at approximately $90,000. Combined, Eastern Iowa casinos saw revenues drop by $1.5 million last month.

Illinois as a whole was down $3.7 million.

“I think it’s economic pressures. People don’t have disposable income and those that do are hanging on to it because they don’t know what’s going to happen,” Bollmann said.

Video gambling machines that have recently popped up in Illinois bars have further depleted the casino’s customers, Bollmann said.

So far, there are 3,300 machines in bars across Illinois. Another 22,000 bars have submitted applications for licenses that would permit them to have five machines a piece. As a result, more than 100,000 machines could be in Illinois bars before the end of the year.

“A majority of our play comes from Illinois,” Bollmann said. “There’s another level of competition we haven’t seen in the past.”

The looming legislation to ban smoking in Iowa’s commercial casinos also concerns Bollmann. When the Iowa Smokefree Air Act banned smoking in restaurants, bars and places of employment, casinos were granted an exemption.

While the Senate Study Bill seeking to remove the exemption for casinos from the 2008 legislation is stalled in a subcommittee, Bollmann’s still worried because of the potential impact it could have on his facility and gaming across the state.

Bollmann pointed to the $2.4 billion Revel Casino in Atlantic City, N.J., which hasn’t allowed smoking since it opened last April. Revel officials declared on Wednesday they would be filing for bankruptcy. He also noted $800 million Illinois casinos allegedly lost in the three years following that state’s smoking ban being implemented in 2008.

“We all saw what happened to Illinois and now Atlantic City when smoking is taken out of your business. So hopefully it won’t happen,” Bollmann said.

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