Misdemeanor charges against the top two executives of Peninsula Gaming won’t automatically disqualify them from building the Kansas Star casino near Mulvane, according to the Kansas Racing and Gaming Commission.
State law provides that the commission, which will begin conducting background checks into the company and its key personnel now that Peninsula has been awarded the contract to build the casino, must automatically disqualify an applicant for felony convictions, crimes of moral turpitude, or gambling crimes.
Peninsula CEO Brent Stevens and chief operating officer Jonathan Swain face misdemeanor charges in Iowa for allegedly donating money to the failed reelection campaign of Iowa Gov. Chet Culver in the name of another person, and for willfully failing to disclose a campaign contribution.
They have denied any wrongdoing.
The charges each carry a maximum sentence of one year in jail and a $1,250 fine.
A trial was set for Jan. 5 but has been delayed 60 days at the defendants’ request.
Their convictions wouldn’t automatically be a deal-breaker for the Kansas Star, said Patrick Martin, interim executive director of the Kansas Racing and Gaming Commission.
But the commission has broad discretion to go beyond the three automatic disqualifiers and base its decisions on the misdemeanors and factors such as the habits, reputations, and associations of the officers, he said.
“Racing and Gaming looks at essentially everything involved in a person to determine if they’re fit to be involved in gaming in Kansas,” Martin said.
The commission has 10 days to conduct the investigations, but may ask for a 60-day extension from the governor.
The checks will look into Peninsula’s managers, officers, directors and business entities involved with the company’s casino project.
The commission sends out a 57-page “business entity disclosure” form covering corporate relationships, shareholder and investor information, and civil and criminal actions against the companies.“It really covers the waterfront of any information that might be pertinent.” Martin said.
Personnel checks look into any civil and criminal actions against them, financial histories, work histories, and other relationships.
Martin called the checks “highly intrusive.”
“This is an unusual industry, and it requires some unique investigation, “ he said.
The commission’s investigation will be similar to those conducted by gaming enforcement agencies in other Midwestern gambling jurisdictions such as Iowa, Indiana, and Illinois, he said.
Enforcement agencies in other states will share background information with Kansas, he said. Kansas has contacts in Iowa to provide information on Peninsula Gaming, Martin said.
Under Kansas’ expanded gambling law, information gathered during background checks is closed to the public.
There are practical as well as legal reasons for that, Patrick said. People speak to investigators believing they are speaking in confidence, he said.
“We wouldn’t be able to ensure that confidence and the disclosures we got if we opened up what we have,” Martin said.
The commission also will conduct background checks for the licensing and certification of the company and its employees as construction on the Kansas Star begins and the company starts hiring.In order to do gaming business in Kansas, the company, as well as individuals and vendors who want to work for the company, must be approved by the commission.
Everybody who applies for a job at a casino is checked, Martin said. Not all are subject to top level checks, but all undergo criminal background checks.
The commission denied about 7 percent of job applicants at the Boot Hill Casino in Dodge City, which opened a year ago, Martin said. Five people were denied in the last three months.
The two most common reasons were failure to disclose information to regulators, and knowingly providing false information, Martin said.
Stevens has said that any member of Peninsula who fails a background check conducted by the Kansas Racing and Gaming Commission after the board makes its selection will step aside.Once the Kansas Star is up and running, the racing and gaming commission will conduct on -site regulation around the clock, Martin said.
The casino will pay the regulators.
Martin said that arrangement isn’t a conflict.
“This is how a number of jurisdictions do it. We submit a bill to them, they pay our actual expenses,” he said. “They have no say-so over what kind of information, or what kind of work we’re doing.”