Group playing weak hand in high-stakes casino game

In what sounds like a high-stakes poker game, an investment group in the Lake of the Ozarks region is betting at least one casino in Missouri — possibly Century Casino Cape Girardeau — will cash in its chips and fold in the near future, opening a seat at the table for a gaming operation in the lake area.

An article Thursday in Jefferson City's News Tribune quoted Tim Hand, head of Osage River Gaming in Osage Beach, Missouri, who said he believes four of the state's 13 casinos are underperforming and at risk of closure. He was quoted as saying his investment group thinks the Cape Girardeau casino could "close its doors because they're just in a market where there's not enough population to support it."

Hand, who retired from the banking industry in 2016 and is now a financial and business consultant in the Lake of the Ozarks region, believes his investment group could acquire the gaming license of a closed casino — perhaps Cape Girardeau's license — and establish a casino in the lake vicinity.

Never mind the minor matter of the Missouri Constitution, which limits the number of gaming licenses and restricts casino operations to locations along the Mississippi and Missouri rivers.

Changing the constitution would require a statewide referendum and that would require legislative approval or a petition initiative.

A Missouri House resolution calling for geographic expansion of casino locations, HJR-87, never made it to the floor during the 2020 legislative session and its sponsor, Rep. Rocky Miller, a Republican from Lake Ozark, left the state Legislature a few months ago because of term limits.

Hand told the News Tribune other legislators are interested in sponsoring similar bills, but he hasn't named them. Meanwhile, some legislators have indicated opposition to a casino in the lake area because the region already has a labor shortage and there is concern a casino could lead to increased crime.

But even if Osage River Gaming could overcome the current casino location limitations, Century Casino general manager Lyle Randolph says it's unlikely the state would add a 14th license and he says he has no concerns about the viability of the Cape Girardeau and Caruthersville casinos.

"The number of casino licenses would still be capped at 13," Randolph told me last week.

As for Hand's suggestion Century Casino operations in Cape Girardeau and Caruthersville are underperforming, Randolph said that's simply not the case. He referenced a meeting he had last Wednesday with Missouri Gaming Commission chairman Mike Leara who said Century Casino Cape Girardeau weathered the COVID-19 economic challenges better than most of the state's other casinos.

Recent activity at the casino confirms Leara's observation. Admissions at the Cape Girardeau casino have returned to pre-pandemic levels, with 108,656 turnstile "clicks" in April, and the gaming operation is once again generating millions for the state and for the City of Cape Girardeau.

Randolph told me Century Casino currently generates "about a quarter million dollars" every month for the city. As a "home dock city," Cape Girardeau's Casino Revenue Fund receives 10% of the casino's gaming tax, which is 21% of the casino's adjusted gross revenue, and a dollar for each admission through the casino's turnstiles. The state receives the remaining 90% of the gaming tax as well as a dollar for each admission.

"So in April, as reported by the gaming commission, the amount for the city would be $152,706 in gaming tax and $108,656 in admission tax," Randolph reported.

Among other things, the city's Casino Revenue Fund is used for riverfront and downtown development, capital improvement projects and regional economic development efforts.

In 2019, the casino paid more than $2.5 million into the fund. In addition, Century Casino makes a monthly payment of 0.3% of its gross gaming revenue to a Riverfront Region Economic Development Fund and up to 1% in additional sales tax to the City of Cape Girardeau in lieu of being included in Cape Girardeau's Downtown Community Improvement District.

During his meeting with Leara last week, Randolph said he shared the casino's tentative plans for an adjoining hotel. That's something I reported on in December 2019 when Century Casinos chairman Erwin Haitzmann told me a hotel "is one of the things we're looking at."

"They (Osage River Gaming) apparently looked at the list of casinos in the state, picked the rural or out-state casinos and said we must be underperforming so they should be moved to the Lake of the Ozarks. Of course, that is not the way it works."

Randolph said even in the highly unlikely event an existing license were to become available, the state gaming commission "does not allow a license to just be moved" from one region to another.

"The goal in granting casino licenses was not just to have casinos in large metropolitan areas, but to add them to some areas of the state that needed additional employment or to help stimulate local growth. I think it's safe to say that the casino license in Caruthersville may actually be more important than a casino license in an already vibrant economic or tourist area (such as the Lake of the Ozarks)," Randolph told me.

"Also, the commission does not allow a license to just be moved from one location to another," he continued. "As you may recall, when the President Casino on the Admiral (in St. Louis) was forfeited, the commission did not just allow the prior license holder to move it to a new location. A full evaluation of various locations was done and several locations submitted proposals for the license. Cape Girardeau beat out others in the KC and St. Louis market, not necessarily because Cape would generate more revenue, but because the commission felt the overall impact and benefit for the local area and the state was greater."

Randolph said he thinks it's "unfair for anyone to look at rural [casino] locations and say they are underperformers. That would be like looking at our local university or hospitals and saying they underperform because they have less enrollment or serve fewer patients than they would if they were located in a more populated area."

As for Ozark River Gaming's overall efforts to bring a casino to the lake region, Randolph told me he thinks the group's investors are taking the wrong approach.

"If they want a casino at the Lake of the Ozarks, they should draft a referendum that allows casinos on the lake AND expands the number of licenses to 14," he said. "but even in that situation, the Missouri Gaming Commission could decide that a license is better served at another location on the Missouri or Mississippi River."

In spite of the odds, Hand said he and his investment group are undeterred.

"One way or another," he recently said in a Lake of the Ozarks publication, "we will prevail."

Open house invitation

Although it's not a "business" in the traditional sense, I want to acknowledge Community Partnership of Southeast Missouri, which is settling into its new home, the former Cape Girardeau Police Department headquarters at 40 S. Sprigg St.

CP, formerly the Community Caring Council, will host a public open house from 8 a.m. until noon Friday, during which you can enjoy a cup of coffee in one of the building's former jail cells.

A ribbon-cutting is slated for 11:30 a.m. Friday in front of the completely remodeled building.

Congratulations to CP executive director Melissa Stickel and the organization's staff and volunteers.

Too late for the Business Notebook

I learned late Friday afternoon, after the deadline for this week's Business Notebook, the Texas Roadhouse locations in Cape Girardeau and Paducah, Kentucky, are trying to fill more than 40 full- and part-time positions.

Both locations will host a daylong job fair for a variety of roles.

For more information or to reserve an interview time, go to texasroadhouse.jobdetails.io/hiringday.

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