The Wichita Eagle, KS
07-14-07
In Iowa suburb, casino seems good fit
BY FRED MANN
The Wichita Eagle
DES MOINES - Sandy Crawley prowled the smoky casino floor at Prairie
Meadows in jeans and a pink ball cap on a recent weeknight, playing the 25-cent
slots with her sister.
Neither was having any luck.
But when a machine they'd been waiting for became available, they quickly hit a
"Sizzlin' 7" jackpot that paid 500 quarters.
One hour later, most of the coins were gone, and Crawley, a retiree from
Karsruhe, Germany, was nearing her $200 loss limit one more time.
"Most of the time you leave here broke," she said.
Which leaves the state of Iowa, the city of Altoona, and Polk County a little richer.
Prairie Meadows Racetrack and Casino sits in Altoona next to a theme park
about 10 minutes east of downtown Des Moines.
There is a rough similarity to a Sedgwick County casino being located near
Wichita Greyhound Park in Park City or at the Kansas Coliseum, should voters
approve expanded gambling for the county on Aug. 7.
Residents of the area say the facility has been a financial boon in many ways,
and that anticipated problems such as crime and deterioration of the area haven't
happened.
Business owners report mixed results.
Problem gamblers exist, but their numbers have stabilized, according the state's
problem-gambling help line.
In a state that requires voter approval of its expanded gambling facilities every
eight years, it was endorsed by a large margin in the most recent vote.
Prairie Meadows is owned by Polk County and operated as a nonprofit under
Iowa law. It pays 24 percent of its adjusted gross revenue in state and local
taxes, which bring millions of dollars every year.
According to the Iowa Racing and Gaming Commission, Prairie Meadows in
2006 had a $188 million economic impact on the state, paid $49 million in taxes
and contributed more than $32 million to city and county governments and
charitable groups.
Located near the intersection of I-80 and a bypass to I-35, the facility draws most
of its customers from Iowa, as well as conventioneers. Prairie Meadows has no
hotel, but several motels line the highways nearby.
Prairie Meadows growth
Prairie Meadows opened as a racetrack in the early 1980s and went bankrupt,
but found new life and prospered after slot machines were installed in 1994.
Since then, the facility has helped finance a massive downtown redevelopment in
Des Moines, which has a metro population of about 500,000. Money has gone to
the Wells Fargo Arena, the library and science center, and to street
improvements.
In Altoona, formerly a small railroad town with no retail sales to speak of, there
are two major retail corridors today, including new major stores west of Prairie
Meadows such as Wal-Mart, Target and Lowes. Growth that was traced in part to
the facility created the boom, local officials said.
At the same time, the city has retained its original Old Town block of quaint brick
storefronts.
Altoona has made the transition to an upper-middle-class community, with
quarter-million-dollar to half-million-dollar homes, said Don Coates, executive
director of Eastern Polk Regional Development Inc.
The city also has a new water tower and water treatment plant made possible by
the casino, racetrack and theme park.
"Basically, all our facilities are brand new except City Hall," said Altoona's city
manager, Jeff Mark.
Altoona, he said, is adding restaurants and shops, not losing them.
Money from people like Crawley also has helped finance such quality-of-life
developments as a large recreation center and aquatics park.
Prairie Meadows pays $5 million in property taxes to Altoona a year. As a result,
the city has the lowest property taxes for residents of any full-service town of
5,000 or more people in Iowa, according to Mark.
This year, the city received about $850,000 in gaming taxes, he said.
Police: No major impact
Crime hasn't increased in Altoona due to the casino, according to Altoona Police
Chief John Gray. Horror stories about prostitution, robberies and violent crime in
the area haven't come true.
"It didn't have a large impact on our community," he said.
Joe Diaz, who supervises the gaming enforcement bureau within the Iowa
Division of Criminal Investigation, said there hasn't been a significant increase in
major crimes in any of the state's casino communities as a result of a casino's
presence.
"There was a lot of concern 20 years when this first started that we'd see a lot of
prostitution and organized crime infiltrate into casino ownership, and things like
that. None of it has panned out," he said.
Inside casinos, officers make arrests for minor crimes such as domestic disputes,
public intoxication and petty crimes that happen anywhere large groups of people
gather, Diaz said.
They also find cases of money laundering, a natural crime anywhere large
amounts of cash change hands, he said.
Diaz has three of his officers stationed at Prairie Meadows, while off-duty Altoona
police and Polk County sheriff's officers also provide security.
But there have been no increases in robberies, aggravated assaults, homicides
or other major crimes because of Prairie Meadows, Diaz said.
Altoona resident Karen Birchmier, a mother, church-goer, and teacher at a
magnet school on the west side of Des Moines, said she feared Prairie Meadows
would change the community for the worse when it opened.
"I was a little concerned with what kind of clientele would come along with that.
But I haven't seen that element," she said.
There are no pawn shops or payday loan stores in the area. Altoona zoning
codes don't allow them.
"We would have to put in a heavy industrial zoning district, and that would have
to be approved by the City Council," Mark said.
Paulette Franklin, executive vice president of the Altoona Area Chamber of
Commerce, said there is only one pawn shop on the east side of Des Moines.
Helen Blaney, 81, owner of a fabric shop in the Old Town area of Altoona, has
fought for years to save the district. She watched businesses up and down the
street close, including a bird-seed place, a boutique that specialized in handmade items, a dress shop, a tea room and a consignment shop.
But Prairie Meadows wasn't the culprit, she said.
"What has hurt the town of Altoona more than anything is Wal-Mart," she said.
Blaney disapproves of gambling at Prairie Meadows, but she also admits, "I think
for the most part we have had a good impact from it."
Said Coates: "All the red flags that were out there when they were talking about
building the facility have been pretty well neutralized."
Public largely approves
Prairie Meadows started as a horse-racing facility when the Iowa Legislature
introduced a bill in 1983 to broaden the state's agricultural industry and fund
economic development. Two years after it opened in 1989, Prairie Meadows filed
for bankruptcy.
A 1994 bill allowed Prairie Meadows to add slot machines, and in less than two
years, the facility repaid $90 million in bond debt to Polk County.
Iowa law requires residents to vote on gambling every eight years. The last vote
on Prairie Meadows was in 2002, and the measure passed 67 percent to 33
percent.
Two years later, the facility opened table games. Today, it has 1,737 slots
machines and 55 table games. Racing of thoroughbreds and mixed and standard
breeds continues from April through October.
It also recently completed a $60 million expansion, adding an events and
conference center, a buffet, a fine-dining restaurant, and a new saddling paddock
and walking ring.
As a nonprofit, Prairie Meadows awarded more than $1.5 million to more than
150 area nonprofit programs from revenue generated in fiscal 2006, according to
information provided by the casino.
It has committed another $2.2 million through 2010 to community projects such
the Des Moines Public Library, the Science Center of Iowa, Drake University
Stadium, Greater Des Moines Partnership, and the Institute for Character
Development.
Personal bankruptcies up
Not everybody is enamored with the facility. Tom Coates, director of Consumer
Credit of Des Moines, a nonprofit credit-counseling service, said he sees 400
new people a month for counseling, and 10 to 15 percent of them have gambling
as a core issue.
Since gambling was expanded to include casinos, bankruptcy rates have risen,
said Coates, who also is vice president of an anti-gambling organization, Truth
About Gambling.
"Within a few years, we saw a pretty significant increase," he said. "Iowa was one
of lowest per capita in bankruptcy in the nation, but it jumped to the middle of the
pack."
An Iowa State University study showed that 19 percent of bankruptcies filed
were to discharge gambling debt, Coates said. Of those, gamblers had 30
percent to 40 percent more unsecured debt than nongamblers, he said.
Coates also said that Iowa communities with casinos experienced no growth
from 1996 to 2000 as measured by retail sales taxes, while communities without
casinos had an 18 percent growth rate in the same period.
According to the state's problem gambling help line, calls from gamblers and
concerned family and friends had dropped to just under 2,000 by 2005 from a
high of 4,496 in 1996.
The University of Northern Iowa conducts a monthly telephone survey of 5,000
households in Iowa. In the most recent survey, 33.7 percent of those polled said
they gambled in the past year. Of those, 1.4 percent said their gambling had led
to financial problems.
"That hasn't changed more than a few tenths of a percent over five years," said
Wes Ehrecke, president of Iowa Gaming Association, which promotes the
industry.
Effects on businesses
In downtown Des Moines, restaurants and club owners said they felt a pinch
when Prairie Meadows first opened, but business has returned.
Joe Coppola, owner with his wife, Cyndy, of Java Joe's Coffeehouse in the
downtown entertainment district, remembered weak years when the facility drew
money away from the district.
"I believe they cannot take that many dollars out of a community and not expect
to see some losses in other areas," he said.
But the scene is thriving again with boom of downtown and an increase in
residential development, where occupancy is filling up both high-end condos and
low-income subsidized apartment housing, Coppola said.
"Anything of that size and that nature of entertainment is going to affect you in
some way when it first opens," said John Scholl, general manager of the
Spaghetti Works restaurant in downtown Des Moines. "Then everything will settle
out."
"I don't think it's made any difference in our business one way or another," he
said.
Amedeo Rossi, managing partner of a bar and a music club, said he doesn't see
Prairie Meadows as competition for his clubs, even though it hosts concerts and
draws big-name entertainment.
"The casino has integrated itself into the community and funded everything from
street repairs to all sorts of things," Rossi said. "They've been so heavily involved
in the community it's almost like we're part of the casino."