Gambling on a River : Hard-Pressed Iowans Bank on Floating Casinos to Lure Prosperity to Their Battered Farm Economy

The blast of a whistle and an off-tune calliope mingle with the rat-tat-tat-tat of slot-machine coins shooting into jackpot trays as a bygone Mississippi pastime comes back to life.

“They’re just having a ball over there on the dice tables,” Ruby Frank, a gray-haired woman from Muscatine, Iowa, exclaims above the din in the cramped casino of the Diamond Lady, a newly launched stern-wheeler. “Somebody’s really hot!”

“I’m 25 (dollars) down, and I had a hell of a good time,” a tall young man standing nearby interjects as the boat headed for the dock.

Since April 1, three paddle-wheelers of fortune packed with slots, blackjack tables, roulette wheels and hundreds of happy passengers have been plying a few miles of Iowa’s Mississippi River. The state is wagering that enough game-crazed denizens of the Midwest will come running to the riverboats so that river towns will be transported to a new prosperity.

Gambling experts say the odds are not necessarily in Iowa’s favor. But so far the riverboats are doing a land-office business.

“On opening day we had almost 3,000 people,” says Robert Kehl, the entrepreneur behind the Dubuque Casino Belle. “We’re putting in another 12 lines of phones. We’ve got about 3,000 busloads booked already. Yesterday we had 99 bookings. It’s just wild.”

Among the people who have rolled like loose change to the riverboats are retirees Al and Rosemarie Bowman, of Berea, Ohio, who stopped by in their recreational vehicle.

“It’s always been a fantasy of mine to ride a paddle boat,” Rosemarie says contentedly as she watches the scenery float by from the top deck of the Diamond Lady.

They’re comfortable with the state-mandated $5-per-bet limit and $200 loss limit per cruise. “I think $400 is enough to spend in one day,” Al says. “We don’t spend $600 in five days in Las Vegas.” He predicts a great future for the venture: “Oh, I know it’ll go. In the height of summer, you won’t be able to get near this place.”

That’s just what Iowans have in mind. First get the tourists here, then show them everything else the state has to offer. The goal is to create a tourism industry that will generate enough jobs and revenue to diversify an economy that was devastated by the farm crisis of the early 1980s.

Iowa suffered a double whammy: Not only did farm incomes and land values take a dive, but the major manufacturing industry, agricultural equipment, collapsed in their wake. Never again, vowed state leaders. As if to punctuate the point, one of the boats docks at the site of a former J.I. Case Co. tractor factory.

“We don’t believe our product is gambling; we believe our attraction is gambling,” says Mick Lura, administrator of the Iowa Racing and Gaming Commission.

“We believe our product is the state of Iowa and the beautiful Mississippi River. . . . We had that product already. We did not have a way to attract people to it.”

The state could find a fertile market among the 34 million people who live within driving distance. Iowans hope they can cash in on the gambling fever that has seized the Midwest in recent years. Their state alone, for example, has three dog tracks, a horse track, a state lottery and Lotto America--none of which, except the lottery, existed before 1983. And four more riverboats are scheduled to start in the next year.

Illinois will have a riverboat casino within months, but with no loss limit. Deadwood, S.D., has had casinos since 1989; three Colorado towns will start gambling this year.

On April 4, the Missouri House of Representatives approved riverboat gambling in that state. The bill awaits passage by the Senate. On the same day, a similar bill was introduced in the Kansas Legislature. Mississippi plans a riverboat casino in Natchez.

Yet signs are beginning to appear that the gambling dollar may stretch only so far. The well-established Ak-Sar-Ben horse track in Omaha is threatening to close, and profits are sagging at a 2-year-old greyhound track in Kansas City, Kan.

Though the riverboats don’t worry the big guns (“It’s peanuts,” sniffs Harold Vogel, gaming industry analyst for Merrill Lynch & Co.), skeptics wonder when the saturation point will be reached.

“Where are these people all going to come from?” asks I. Nelson Rose, a gambling-law expert at Whittier College School of Law in Los Angeles.

The real test, he believes, will come once Illinois opens its own riverboat casinos. Then, he says, the Iowa gambling industry could find itself headed for the shoals.

Bill Eadington, a professor of economics at the University of Nevada-Reno and director of the campus’ Institute for the Study of Gambling and Commercial Gaming, agrees.

“As long as they are the only game in town, they’re going to do very well,” he says. “When Illinois opens, the difficulty may arise with the proximity to major population centers. It could have a serious impact on Iowa’s ability to draw people from the Chicago market.”

And Bill Thompson, a professor of public administration at the University of Nevada-Las Vegas, doubts the venture will provide enough employment to boost the region economically. He cautions, “For every job they create, they’ll take a job away from other places, such as Des Moines or Peoria, because the recreational dollar will go only so far.”

But whatever reservations Iowans may have had about betting the farm on legalized gambling, they’ve been banished for the time being.

“We’ve let too much get away from us in this state,” Franks says as she plays the slots aboard the Diamond Lady. “It should turn the economy around. We’re hoping for it.”

Construction worker Joe Busolo, for one, had been unemployed for three years. Now he’s a croupier on the Diamond Lady. His daughter will be working on the same boat.

“This whole new industry is going to bring a renewed sense of hope and pride” to people of the area, says Iowa native Mary Jo Graettinger, publicist for the President Riverboat Casino, the biggest of the three. “They’re going to stand a little taller. They’re going to change their attitude.”

For games supervisor Kurt Nitz, who just graduated from college, the riverboat beckoned as an alternative to the family farm in Port Byron, Ill.

“I saw there was a new industry opening up. It seemed like a good opportunity, especially getting in on the ground floor,” he says. He had never been in a casino before starting work on the President.

The casino that Nitz is charged with keeping honest covers 27,000 square feet of gaming space: 680 slot machines and 34 gaming tables extend the entire breadth and 297-foot length of the President. It’s a huge space. A brass band plays on the bandstand and lights blink all around.

The dealers sport floral vests over puffy white shirts with black garters around the arms. The cocktail waitresses wear above-the-knee maroon brocade dresses with fishnet stockings and low-heeled shoes. The effect, however, is anything but lascivious.

Like folks all over the Midwest, the casino personnel display an easy good humor and unspoiled mien. They come from the towns and small cities in the region, where daily life still vindicates a belief in honesty and human decency. Their faces brighten with unforced smiles.

It’s all part of the package. “We don’t want to turn into a Las Vegas or Atlantic City, so we have created this aura of wholesomeness around our industry,” Lura says. The $200 loss limit is designed to make customers comfortable. Part of the admission and food revenues goes to nonprofit community development agencies, which own the boats in tandem with the riverboat operators.

“What we’re really offering,” Graettinger says, “is Mississippi theater. It’s entertainment more than it’s gambling.”

Robert Kehl’s boat, the Dubuque Casino Belle, takes that maxim literally. It has a theater on board. The show features “the God-Bless-America type stuff. Very patriotic,” he said. On the Diamond Lady, passengers are greeted by Mark Twain in white suit and cigar, while a river belle in a bonnet as wide as her hoop skirt sings three stanzas of “Oh, Susanna!” on request in the dining parlor.

The concept, according to Graettinger, is to combine the charm of the Mississippi tradition with “the glamour and glitz of Las Vegas-style entertaining.”

But no sleaze, please. This is Iowa.

On a drizzly day late last week, while gamblers concentrated on their work in the President’s casino, at least one passenger had a nagging sense that the boat wasn’t getting anywhere.

“We have a problem,” Graettinger confides over a breakfast of indigenous cuisine--scrambled eggs, sausage, liver and onions, muffin, and gravy and biscuits. “We can’t get under the bridge.”

The Mississippi had risen so high with spring rains that the 55-foot-tall President was confined to about three-quarters of a mile of river room, between a dam upstream and the Centennial Bridge. For this morning’s “cruise,” the President simply drifted out to the middle of the river and stayed even with the dock.

At the end of two hours, it drifted back in and disgorged its passengers. For anyone not gambling, there was little to look at besides the faded downtowns of Rock Island, Ill., and Davenport, Iowa. But no one seemed to notice.

In winter, when the river freezes, the boats won’t even get to the middle of the river. From Nov. 1 to March 31 they’ll remain moored at the bulkhead but may still admit gamblers according to their summer cruise schedule. Rose calls this “the casino by subterfuge . . . the bizarre idea that if you surround the casino by 30 feet of water, it somehow sanitizes what goes on on the boat.”

Of course, like any shopping mall, it is sanitized. And like Disneyland, it’s all fake--from Mark Twain’s wig, to the non-functional smokestacks on one reproduction stern-wheeler, to the electronic tape that runs the calliope. Just because the paddle wheel turns, don’t assume that’s what’s pushing the boat.

Rose sees the steamboat shtick as the Iowans’ ultimate undoing. It fosters the illusion “that all we’re creating is adult entertainment,” he said. He clarifies the issue: “The purpose of legal gambling is to take as much money as you can from your customers without losing your license.”

The Pollyannas in Iowa have yet to figure that out, he says, but sooner or later, they’ll have to.

Rose warns that the riverboats could be a threat to the health of the larger gambling industry, contending that the loss limits, designed to protect the customers and the state, instead jeopardize the entire project.

But Thompson declares bluntly: “From our perspective in Las Vegas, it’s not a threat. Quite the contrary. Some people who don’t know they like to gamble will go on the boats, discover they like it and come to Vegas. It’ll also further legitimize our industry.”

Meanwhile, in the first week of the riverboat casino operation, the Iowa House of Representatives barely defeated a bill to lower the legal gambling age from 21 to 18. And soon there will be pressure to match Illinois’ higher gaming limit.

Iowans will worry about that later. For now, they’re busy serving hearty meals and dealing blackjack to assorted low rollers and slow-buck artists who otherwise wouldn’t be there. They have an industry to build.

Will it float? Iowans answer: You bet!