Pandemic causes revenue shortfall for Dubuque casinos

Jesus Aviles

Prolonged closures prompted by COVID-19 resulted in a 20% decline in gaming revenue at Dubuque’s two casinos over the past 12 months.

The declines were outlined in a report by the Iowa Racing & Gaming Commission, which concluded its most recent fiscal year on June 30.

The final figures showed that Iowa casinos collectively recorded $1.16 billion in gaming revenue in fiscal year 2020, down from $1.46 billion during the previous year. The 20% decline in statewide revenue was nearly identical to the revenue dips in Dubuque.

At Diamond Jo Casino, revenues slid to $56.3 million in the latest fiscal year after reaching $69.1 million in the year ending June 30, 2019. Q Casino saw revenues slide from $50.5 million in fiscal year 2019 to $39.7 million in the latest year.

Q Casino CEO Jesus Aviles said a year that had many bright spots was derailed when the realities of COVID-19 hit home.

The spread of the virus prompted mandated shutdowns that commenced in mid-March and lasted through April and May.

“It was all related to the pandemic,” Aviles said. “Even if you look back at January and February, which usually have a very slow pace, we really came out strong in those months (in 2020). COVID came along and really slowed us down.”

The sting of these revenue losses was, to a small extent, alleviated by a successful reopening.

Both Q Casino and Diamond Jo Casino commenced operations on June 1 after prolonged closures.

The Dubuque market saw gaming revenues of $10.5 million in June, an increase of more than 3% compared to the same month in 2019. The improvement in the Dubuque market came during a month in which casinos statewide saw a decline in revenue.

While Diamond Jo saw a slight decline in gaming revenue compared to June 2019, Q Casino saw revenue jump by nearly 13%.

“We were surprised a bit by it,” said Aviles. “We cannot complain. It was a great month, and it helped us recoup a little bit.”

Aviles noted that the big numbers came at a time when many popular amenities within the casino remain off-limits.

The casino has yet to reopen The Farmhouse Kitchen, a restaurant that has occupied the casino’s ground level since early 2018. Houlihan’s, also owned by Q Casino, remains shuttered as well, according to Aviles.

Moreover, the novel coronavirus has prompted the cancellation of multiple entertainment events at the indoor Q Showroom and the outdoor Back Waters Stage.

Aviles believes that out-of-state customers contributed significantly to gaming revenues in June, noting that casinos in Illinois and many major Wisconsin markets remained closed during that month.

As these competing properties begin to reopen, gaming revenues at Q Casino could come back to earth.

“It feels like these things will level off,” he said.

Revenues from local sportsbooks, which are not included in the broader “gaming revenue” totals released by the state, provide another window into how local casinos have bounced back.

Dubuque’s two sportsbooks had a combined “handle” — or the amount wagered — of about $525,000 in June. More than $465,000 of these bets were placed with Q Sportsbook, which is the only Dubuque sports-betting venue to offer a mobile betting option.

Kevin Hennessy, director of publicity for FanDuel, which operates the sportsbook within Diamond Jo, said wagering in other sports has increased considerably in the absence of sports such as baseball, basketball and hockey. In recent months, FanDuel has seen growing interest in NASCAR racing, golf and mixed martial arts.

The action on these sports leads industry experts to believe that the upcoming return of Major League Baseball, NBA and NHL will create a surge in sports wagers.

“We believe there is pent-up demand,” said Hennessy.

Aviles said about 20 employees at Q Casino have not yet resumed work. However, the vast majority of Q Casino’s workforce — which stood at 315 prior to its mandated closure — have returned.

Diamond Jo parent company Boyd Gaming in May posted a notice under the federal Worker Adjustment and Retraining Notification Act that it might let go of 25% to 60% of its workforce, which meant anywhere from 110 to 270 Dubuque workers could lose their positions. A statement issued by the company this week indicated layoffs throughout its national footprint were at the “lower end” of this range.

Boyd Gaming officials declined to comment for this story.

Casino Queen Marquette (Iowa) recorded revenues of $16.7 million in the fiscal year ending June 30, down from $21.6 million the previous year.

“In the months leading up to the pandemic, Casino Queen was starting to experience increases in revenue from prior year,” said Marketing Manager Amy White. “With the closure of the casino in March, which is typically one of our busiest months, those increases did not continue.”

She noted that all amenities there have now reopened, with the exception of its entertainment/meeting venue.