Posted on Mon, Nov. 02, 2009

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Lottery board may gamble on casino

BY JOHN HANNA

Associated Press

TOPEKA — Members of a state board in Kansas don't appear to like the hand they've been dealt for proposed casinos in Kansas City and the Wichita area, and they're wondering whether they should fold.

Folding for the Lottery Gaming Facility Review Board would mean rejecting the single casino proposal for either area. The Kansas Lottery would be forced to solicit new proposals from developers to build and operate the casino for the lottery, which will own the new gambling.

Board members have been less than enthusiastic about the Kansas City proposal and the plan to build a casino south of Wichita. During a public hearing last week, the board's consultants suggested both had some limitations in drawing tourists to Kansas, and board members peppered representatives of the companies pushing the proposals with questions.

But the consultants also told the board that the national economy is to blame if either proposal seems short of what the board had hoped for in a casino plan. The consultants said the economy limited competition for contracts with the lottery and led to scaled-back proposals.

Rejecting either proposal could delay a decision on a casino until the economy improves enough to encourage more developers to bid on a contract and applicants to propose more ambitious projects. But consultant William Eadington warned that the economy might not improve quickly enough for those things to happen. And, he said, rejecting a proposal could discourage companies from seeking a contract later.

The board faces a decision that's tougher than picking between two or three competing applicants. Does it accept less than what it wants so that the casinos get built and start generating revenue for the state? Or does it wait for better proposals that would attract more tourists and generate more revenue early on?

"How long will it take for normal to return?" said Eadington, director of an institute on commercial gambling at the University of Nevada, Reno. "It's just a terrible time to go through this process."

The Kansas City proposal calls for a casino overlooking Kansas Speedway, the NASCAR track already at the center of a tourist-drawing area of dining, entertainment and retail shopping venues. The $521 million project is being pushed by the speedway's parent firm, International Speedway Corp., and Penn National Gaming Inc., of Wyomissing, Pa. The two companies had been competitors but joined forces.

The Chisholm Creek casino would be built near Mulvane, about 20 miles south of Wichita. The partnership behind the $225 million venture is another combination of former competitors and includes Lakes Entertainment Inc., of Minnetonka, Minn.

Last year, the lottery had multiple applicants for each casino contract, and developers were proposing larger projects. The board picked developers for each, only to see them back away from their plans when the economy soured and financing became trickier.

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