Sinha challenges casino ‘monopoly’ in Polk Co. to build airport casino

DES MOINES—Rajendra “Reggie” Sinha intrigued Iowans last week when the Business Record, reporting on the typically-mundane meeting of the Des Moines International Airport authority, published a piece on his moonshot proposal to construct a $225 million casino with a 350-room hotel at the airport. After tabling the concept at the board’s meeting last week, they will consider moving forward Feb. 11.

All sorts of puns flew around Des Moines airspace in news coverage of the unconventional proposal by Highview Development Group, the nondescript name for the partnership between Sinha Strategies LLC and Wild Rose Entertainment LLC: “A developer is betting that one project at Des Moines International Airport will take off,” according to WOI-TV’s story.

The concept faces tough odds. If a betting line existed for this project becoming reality by 2024, it might be set at 10 to 1—maybe even 100 to 1. But Sinha, 61, who earned an M.B.A. from the University of Iowa and an M.S. in transportation planning from Iowa State University, is going all in on his dream.

Despite gargantuan obstacles, he remains optimistic. Sinha, a professor of international business at Des Moines Area Community College since 2004, is convinced that no other option exists to ensure that the airport serves as an economic engine of the region instead of a drag and bristles at bureaucratic red tape blocking a potential casino.

Rajendra “Reggie” Sinha / CONTRIBUTED

“Why should there be a monopoly on casinos in Des Moines?” Sinha said in an interview. “There is an opportunity to have another casino in central Iowa. These things are still done in communist countries—allocating who gets what. Last time I checked, we are living in America. As an American entrepreneur, I should be able to apply to build something. You cannot stop me from dreaming or trying.”

Airport officials have sought to a $500 million renovation and expansion of the passenger terminal to 18 gates. The terminal, built in 1948, supports nearly three million passengers per year, an increase of more than one-third since 2013. The airport is still $194 million short. They’ve asked Congress and the state legislature to fill the gap but remain in legislative limbo.

Sinha’s proposal for an “integrated entertainment resort” would allow the airport to secure additional funds, including general obligation bonds, to speed up the construction timeline for the project from 7-8 years to 3-4 years, he said. He estimates that the facility would generate $85 million per year and create more than 1,000 jobs.

“In my opinion as a transportation planner, [this concept] is the only way it will work.” Sinha said, noting that the Federal Aviation Administration restricts the use of funds for passenger facilities and Congress has not authorized an increase in the fee airports levy on passengers—called the Passenger Facility Charge—since 2000.

“Des Moines, being a very small airport, just cannot generate the revenues that larger airports can,” he said. “They’ve built mini-cities inside airports. We cannot.”

A casino-airport combo does not yet exist in the continental U.S. market, although Progressive Gaming International Corp. built a casino at the San Juan-Luis Muñoz Marin International Airport in Puerto Rico, which opened in 2007.

The project faces at least five major hurdles.

First, Prairie Meadows Racetrack & Casino—a hugely influential player in central Iowa’s private, public and nonprofit sectors—opposes an additional Des Moines-area casino: “As one of the two nonprofit casinos in the world—Prairie Meadows being the biggest [the other is Dubuque-based Q Casino]—all our net profits go back to Polk County,” Prairie Meadows president and CEO Gary Palmer said in an interview. “Why they would consider sharing that with a private investor—I can’t imagine that would ever happen, to start with.”

Second, the City of Des Moines‘ leadership opposes the proposal: “While the City is hopeful that Prairie Meadows and the County are able to progress towards a mutually beneficial arrangement concerning airport development and redevelopment, the City will honor its commitment to both Prairie Meadows and the County and oppose any casino expansion that is not affiliated with or approved by those two entities,” Des Moines City Manager Scott Sanders said in a statement.

Third, while the Polk County Supervisors have yet to address this project formally, both the city and county operate under a revenue sharing agreement with Altoona-based Prairie Meadows requiring opposition to a competing casino until Dec. 31, 2026.

Fourth, the Iowa Racing and Gaming Commission must approve any license. Even if they determined after market studies to grant a second license in Polk County, rival casino operators could submit competing proposals.

Fifth, to even reach that stage, Sinha and supporters of the airport casino project would have to organize a Polk County ballot referendum and convince a majority of voters to expand gaming at the potential expense of Prairie Meadows. Airsino boosters would need more than 20,000 signatures from Polk County residents to get the measure on the ballot.

Iowa’s gaming regulator will remain neutral on the proposal until it received an application for a new gaming license, said IRGC administrator Brian Ohorilko. Then it would determine whether to weigh the proposal, typically after conducting at least one market analysis.

“In my own personal capacity, it’s very interesting,” commissioner Jeff Lamberti said in an interview. The regulator’s most recent market studies “did seem to indicate that if there was any underserved market in the state, it could be Des Moines,” he said, referencing strong population growth in Dallas and Polk counties compared to population declines in other areas of the state.

Sinha has powerful allies in his corner, not least Des Moines airport executive director and general manager Kevin Foley and Wild Rose executives. Foley has quietly championed the project. He called Palmer and set up an appointment Dec. 17 to pitch Prairie Meadows on sharing their license to allow an airport casino.

“They said, ‘This is our idea. This is how we think we can get the expansion at the airport. This seems like the post logical thing to do,’” Palmer said. As it happened, Prairie Meadows executive committee planned to meet the next day.

“Our board said, ‘No, we’ll never go with that. Polk County will never go for that,’” Palmer said, noting the board rejection was unanimous. “Polk County taxpayers are the base of Prairie Meadows. All our net profits go back to them. Why they would ever vote to give it to somebody else, I just can’t get in my mind how that would happen.”

Wild Rose has been on a mission to build an urban casino for more than seven years.

After founding a successful insurance firm in the 1970s, Gerald Kirke founded Wild Rose with Michael Richards, now the president of the Iowa Board of Regents, in 2004. Kirke and Richards are prominent donors to Republican Gov. Kim Reynolds, who will select the next Iowa Racing and Gaming Commission members by April.

Gerald M. Kirke
Gerald Kirke, Wild Rose Chairman & Co-Founder / WILD ROSE ENTERTAINMENT

Wild Rose—with three modest properties in Jefferson, Emmetsburg and Clinton—has long eyed a larger market. Most recently, the company unsuccessfully sought a license to build a $40 million boutique casino in Cedar Rapids. The IRGC rejected an additional license for Linn County, turning down the Wild Rose proposal along with a more expansive plan from hundreds of local investors backed by Peninsula Pacific Entertainment.

In 2013 Wild Rose organized an unsuccessful gaming referendum in Warren County, just south of Des Moines, that would have authorized a Norwalk casino. Another effort to explore a casino in Urbandale fizzled in 2012.

“Wild Rose Entertainment supports the Des Moines Airport Authority in its goal of making the Des Moines airport a world-class destination venue that better serves the air travel needs of the community and its visitors as well as acts as an agent for economic development,” according to a statement provided by Wild Rose spokesperson Jamie Buelt of en Q Strategies.

“Should the Highview Development Group project, led and originated by Reggie Sinha, garner the necessary public and regulatory support, Wild Rose would be pleased to be the casino operating partner. At this juncture, the project is conceptional and much work needs to be done before it can come to fruition… The company supports and is part of his efforts to put forth a creative solution to generate a long-term, continuous funding stream for the airport’s much needed improvements.”

In 2017, the last time Iowa considered an urban casino project, the IRGC commissioned two economic studies. A market analysis by Minneapolis, Minn.-based Marquette Advisors noted that “there may be some potential for added gaming development in the Des Moines metro area.” Measuring the ratio of gaming revenue to personal income, the Des Moines (including both Prairie Meadows and Lakeside Casino in Osceola) market’s ratio of 0.85 percent was significantly lower than ratios in other urban markets such as Council Bluffs, Dubuque and the Quad Cities—which ranged from 1.27 to 1.58 percent.

Sinha said that the study supports his contention that there’s at least $160 million of untapped revenue available that a second casino in the market could capture. He also noted that smaller Iowa markets, such as Council Bluffs and Dubuque, support more than one casino.

Sinha has simmered this project for nearly two years. He developed detailed plans for the airport-casino hybrid and engaged an attorney to help him protect the idea as a trade secret by developing a non-disclosure agreement. He then formed Sinha Strategies LLC in Dec. 2018, according to Iowa Secretary of State records, to further his casino concept.

In March, Sinha and Wild Rose—via HDG—submitted their plan to the Des Moines Airport authority in response to the airport’s Jan. 2019 request for quotes to build a commercial development.

“I’m asking the Governor, the legislature, Polk County, the City of Des Moines—let’s put our heads together—is there a way we can find a solution? It’s a win-win for everybody.” said Sinha, a no party voter who described himself as “fiscally Republican and culturally and socially a Democrat.”

Sinha’s operation not fly-by-night

Sinha immigrated to the United States from India in 1982 and began his global transportation consulting business in 1989. The Clive resident has consulted for the government of India and three state ministers on planning complex, intermodal transportation projects (connecting airports with railways, highways and other systems). One project Sinha worked on was located in Mumbai, the second-most populous city in India with some 20 million people. He has partnered with consultants in Dubai on land use planning and in Shanghai on airport projects. Over the past four years, Sinha’s latest project has involved negotiations with Indian state governments to adopt Maglev trains.

The concept ultimately stalled as India’s government inked a deal with Virgin to develop an untested innovation known as a Hyperloop, popularized by billionaire Tesla and SpaceX founder Elon Musk. Facing those headwinds, Sinha sought a meeting with Amazon.com founder and billionaire Jeff Bezos to convince him to back the Maglev concept, as the network could carry freight as well as passengers. Bezos didn’t return Sinha’s calls.

So, Sinha decided to think big in his backyard. He moved on to figuring out how to grow the city of Des Moines’ reputation as a global city to new heights. Despite rejection from Prairie Meadows, Sinha is determined to press forward.

“Hats off to Mr. Palmer, and hats off to Prairie Meadows,” he said. “This nonprofit is good. It does help a lot of people. But that should not preclude me from helping to build another establishment. America is built on competition—private and nonprofit entities. Competition is in our DNA. This is how American is built.”

Sinha said that while Prairie Meadows may experience an initial dip in revenue if a competing casino opened at the airport, that the potential increase in tourism by increasing the airport’s capacity sooner would ultimately benefit both facilities in the long-run.

“I’m willing to keep an open mind,” Polk County Supervisor Matt McCoy said in an interview with KCCI reporter Todd Magel. “What we don’t want to do is kill the goose that laid the golden egg. And at the same time, I do think we need to figure out how we are going to build this airport.”

Sinha will see McCoy’s gander metaphor and raise him.

“Hey, now you could have two geese,” Sinha said. “Maybe each goose’s egg is a little smaller than the larger one, but together they are greater.”

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