State board approves Kansas Speedway casino plan

TOPEKA | Plans for a casino overlooking the Kansas Speedway took a major step forward Tuesday when a state panel unanimously approved the project.

Construction on the Hollywood Casino could begin late next year, with opening day in early 2012.

The casino will be built on Turn 2 of the Speedway. It’s a joint venture of the speedway’s owners, International Speedway, and Penn National Gaming, which operates the Argosy Casino in Riverside.

The project was approved 7-0 Tuesday afternoon by the state’s Gaming Facilities Review Board.

“This was really the final hoop to jump through,” said Tim Wilmott, president of Penn National Gaming. “Now it’s full-speed ahead.”

State lawmakers authorized a casino in Wyandotte County two years ago and several developers quickly stepped forward hoping to build and operate it. All but the Speedway proposal later dropped out because of the recession.

But board members insisted they would have rejected the project and started over if they weren’t convinced the Speedway proposal could work.

The project isn’t as big as some early proposals. And plans for an adjacent casino hotel will be shelved for at least a few years. Still, board members said the state needed to move forward.

"This is about as good as we're going to get under these circumstances," said Board Chairman Matt All.

The first phase of construction will include a casino with 2,300 slot machines, 86 table games and 28,000 square feet of dining and entertainment options.

A second phase calls for a 250-room hotel.

As part of their deal with the state, the Speedway promises to bring a second NASCAR race to the Speedway.

Consultants hired by the state estimate the casino will generate $203 million in gambling revenues in its first year.

Developers say the project would bring 2,000 construction jobs and 1,000 permanent jobs to the county.

Board members said they remain concerned that the developers’ plans don’t call for an adjacent hotel as part of the initial construction phase. They worry that the hotel may never be built, and that without it the casino might not meet the state’s definition of a “destination” casino.

But Steven Snyder, a senior vice president at Penn, said he was confident the hotel will be built once the economy recovers. In the meantime he said the casino will arrange for rooms at nearby hotels, and a shuttle service, to ferry guests back and forth.

Snyder said building a new hotel in the midst of the current economy wouldn’t make financial sense, and could “cannibalize” the business of other hotels in the area.

If the hotel isn’t built within two years of the casino’s opening, the developers must pay a penalty to Wyandotte County.

While board members questioned the timing of the hotel construction, they praised the decision to build on the Speedway. And they lauded both International Speedway and Penn National for their dedication to the project.

“Pardon the pun, but you have a track record for success,” board member Jackie Vietti told the developers. “Is it ideal? No. But we understand the constraints of the economic times.”

The casino already has the blessing of local officials. Wyandotte County’s Board of Commissioners approved a new preliminary development plan for the casino Monday night.

Now, the project needs only a few more authorizations before it can move forward. The state is conducting a background check on developers, as required by state law. And local government officials must sign off on details of the project.

Wilmott said construction is likely to begin in the last half of 2010, with opening day 12 to 15 months later.