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Located In a Des Moines Iowa Suburb, the Prairie Meadows Racetrack
 and Casino Seems a Good Fit

By Fred Mann, The Wichita Eagle, Kan.McClatchy-Tribune Regional News

July 15, 2007 - 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 a quarter-million to a half-million 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 hand-made 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."

Coming Monday: St. Louis


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