Iowa panel OKs casino in Lyon County, rejects proposals from Fort Dodge, Ottumwa, Tama County

Iowa gaming panel OKs Lyon County casino

JOHNSTON, Iowa — The Iowa Racing and Gaming Commission on Thursday approved an application for a casino license in Lyon County in northwest Iowa but rejected requests from three other communities.

The five-member commission unanimously approved the Lyon County casino, noting it wouldn’t cut into the business of Iowa’s 17 other state-licensed casinos and would draw gamblers from Sioux Falls, S.D., only eight miles from the new development.

The panel unanimously turned down requests from groups in Fort Dodge, Ottumwa and Tama County.

“Lyon County has met the criteria and will not have an impact on existing casinos,” said Commissioner Andrea Rivera-Harrison.

Commissioner Paul Hayes noted the Lyon County casino, located in Larchwood, is expected to draw 80 percent of its revenue from out-of-state gamblers. Estimates were that the other three would get less than 10 percent of their revenue from outside Iowa, Hayes said.

Commissioner Kate Cutler said she made her decision to only support the Lyon County plan because studies have shown the other locations would draw business from already established casinos.

“We have really hard numbers that show that there is a saturation point in this state,” Cutler said. “This is a real economic concern for all of us.”

The Lyon County casino will be part of a $120 million resort that is expected to include an 18-hole golf course, 100-room hotel, 1,200-seat event center, three restaurants and 900 slot machines. The planned Lyon County Casino and Golf Resort would have $80 million in gross revenue, of which $70 million would come from gaming.

Supporters estimated it would provide 400 permanent jobs and hundreds of additional construction jobs, providing a huge economic boost to Lyon County, which has a population of about 11,000.

Plans call for construction of the casino to begin in June with an opening planned for July 2011. The golf course would open by 2013.

Larchwood is only about a 10-minute drive from Sioux Falls, and plans for the casino have angered some in South Dakota who argued that state should approve a casino rather than allow the gambling dollars to go to Iowa.

A group of Sioux Falls business leaders have developed a plan with the Flandreau Santee Sioux Tribe to build a resort casino near Sioux Falls, but Gov. Mike Rounds said last month that federal officials might not approve of a profit-sharing plan between the tribe and the state. Supporters of the Sioux Falls casino have said they’ll wait to pursue the plan until next year, when a new governor takes office.

In a telephone interview Thursday with The Associated Press, Rounds acknowledged that the Lyon County casino would siphon money from South Dakota and could reduce revenue to the state’s video lottery system. But he added that a large development just miles from the Sioux Falls could help the state.

“If there is a positive, it may very well be that people from Sioux Falls might have one more place for job opportunities and then come back to Sioux Falls where they want to live,” Rounds said. “I suspect (visitors) may very well want to shop in Sioux Falls.”

Dan Kehl, chief executive officer of the Lyon County development, said he thinks the resort will be good for the region.

“I think South Dakota, once we get it open and they see what we’ve built, they’ll feel happy about us being in the area,” Kehl said. “We’ll be a nice asset for the whole Sioux Falls area.”

In turning down the other three casino proposals, members of the Racing and Gaming Commission said it would be three to five years before they would consider granting more licenses.

More than 300 people jammed into a hotel meeting room for the commission’s vote. Many left unhappy.

Although the commission largely based its decision on a desire to protect the viability of existing casinos, Fort Dodge Mayor Matt Bemrich rejected claims that his community’s proposal would hurt casinos in Emmetsburg and Altoona.

“I think we proved that it was not an issue and we were going to open up a new market and more of a market,” Bemrich said.

Efforts to open new casinos had become a political issue, as Republicans criticized Democratic Gov. Chet Culver for announcing his support of all for permit applications. Later, questions were raised about $25,000 in donations from casino supporters in Fort Dodge to Culver, leading the state attorney general to appoint a special prosecutor who will investigate the matter.

There was little discussion of that issue at Thursday’s meeting.

Associated Press writer Molly Hottle in Des Moines contributed to this report.