News

Loss Leader

Kansas City keeps losing money on an old, badly played hand.

By David Martin 

Middle schoolers are swimming in gamblers' tears.

That's what I thought last week while a helpful chap named Bob led me on a tour of the North Kansas City Community Center. Bob had found me wandering around the weight room. He'd guided me through the maze of machines, and we counted the (10) glass backboards in the huge gymnasium. Then we gazed upon the indoor "aquatic experience" as busloads of field-trippers from a junior high in Kearney enjoyed the tricked-out pool.

I had come to see what a casino has done for a community of 5,494 people. The answer: quite a lot.

Revenue from Harrah's North Kansas City Casino & Hotel paid the entire $13 million cost for the center, which opened in 2000. Harrah's also subsidized expansions of the library and the police station, the renovation of a fire station, the installation of fiber-optic lines and sewer upgrades. This year, North Kansas City will collect $12.8 million from Harrah's, which amounts to 25 percent of the town's budget.

"Harrah's has been a great corporate citizen for North Kansas City," City Administrator Pamela Windsor tells me.

She's not kidding. For North Kansas City, the wages of sin are not death but a rad climbing wall.

I decided to take my own field trip to North Kansas City after the Missouri Gaming Commission announced that it was going to consider an application to build a casino in Sugar Creek, just up the river on the south side.

It's an interesting proposition. Two University of Missouri-St. Louis professors have studied the market and determined that adding a boat to the metro won't create new business as much as steal it.

Just the same, the gaming commission seems to want to grant another license. Gene McNary, the commission's executive director, says that if a new facility forces an existing operator out of business, then so be it. "It's not our job to protect any casinos," he tells me.

Are you listening, Kansas City, Missouri? Because the runt of the casino litter is within your borders.

After the Bob tour, I sought out a community center near the Isle of Capri, which sits in a moat at the foot of the Paseo Bridge. I could see the Isle's faux steam stacks as I pulled up to Garrison Community Center in Columbus Park.

North Kansas City seemed far away as I entered the building, which was built in 1913 and last renovated when Eisenhower was president. The game room gave off the cheer of a scene from One Flew Over the Cuckoo's Nest. Shut down until summer, the computer lab now serves as a depository for Pampers given to teenage mothers. The basement weight room reminded me how important it is to get a tetanus vaccination. "We'd like to get some new equipment down here," an employee told me as we stood among rusty barbells and weight benches with ripped padding.

The difference in the two community centers is mostly a math equation.

Harrah's pumps money into a city with 1.2 percent of Kansas City's population. With so few citizens to serve, North Kansas City officials have a much easier time making their casino dollars pop. Same with Riverside, home of the Argosy Casino Hotel & Spa.

But size isn't the only thing working against Kansas City. The city is stuck with the casino that does the least business and makes the weakest efforts to remain competitive.

Last December, Isle of Capri admitted 237,156 customers — a little more than half the business of Argosy, the No. 3 casino in the market. Last place comes honestly to the Isle of Capri. The casino has stood largely still while its competitors have added restaurants, hotel beds and concert rooms.

Ameristar and Harrah's book boxing events and artists such as Lucinda Williams. Isle of Capri showcases cover bands.

Argosy starts offering massages. Isle brings in more slots.

Not for nothing did one of the MIT card counters, immortalized in the best seller Bringing Down the House, call an Isle of Capri riverboat in Louisiana an "Isle of Debris." And it's the one casino that KC, Missouri's largest city, calls all its own. (Ameristar straddles Kansas City and tiny Randolph.)

The city invited this unhappiness by mismanaging the advent of legalized gambling.

Kansas City originally agreed to lease the Isle site to Hilton Hotels Corp. Then-Mayor Emanuel Cleaver let the Port Authority take the lead in negotiations. Cleaver, a minister, didn't like the idea of opening a gambling den. The lure of easy money won out, however.

The deal reeked. Hilton executives had paid off Elbert Anderson, the chairman of the Port Authority — a transaction for which the hotel chain paid a $655,000 fine to avoid prosecution. Anderson ended up in prison on unrelated bribery charges.

Once gambling began on the south banks of the Missouri, the city didn't use the proceeds to create a magnificent riverfront, as some leaders had talked about. Instead, the money went to other needs, such as streetlights. Gambling improved the riverfront, but only a little. Berkley Riverfront Park is today another underused remnant from the half-assed Cleaver years (see also: Union Station, 18th and Vine).

Hilton eventually sold the boat at a loss to Isle of Capri. At the time, Isle officials talked about adding a hotel. But the investments have been mainly cosmetic; company officials seem content to let the slot floor work its magic.

Its market share dwindling, the Isle faces the prospect of new competition in Sugar Creek. In addition, Wyandotte County is getting into gambling in a big way. Is the metro's No. 4 boat worried? An Isle of Capri spokeswoman, Jill Haynes, tells me in an e-mail that the company "is in the process of a strategic review for each market where we operate, including Kansas City." That's reassuring.

Already, Kansas City is having to scrimp its casino money. The city's new budget projects a $3 million loss in gambling revenue — and Wyandotte County hasn't even broken ground on its sure-to-be-fabulous casino near the speedway.

Vincent Gauthier, the current Port Authority boss, is playing it cool. The Isle site, he tells me, remains a great location. Gauthier also notes that the Isle of Capri announced a significant expansion, but it had to put those plans on hold when the state decided to rebuild the Paseo Bridge. "It's still our hope they'll step up and make the necessary improvements," he says.

Hope's great. But you can't swim in it.