he Kansas Racing and Gaming Commission voted unanimously this week to reject the state’s management contract with Penn National Gaming Inc. The company announced two weeks ago that it was walking away from the pending agreement to build and manage the casino in Cherokee County.
The vote sets the stage for the Kansas Lottery Commission to take new applications for the Southeast Zone, which includes Cherokee and Crawford counties. The Lottery will own the gambling but the developers will build and handle the day-to-day management of the casinos.
A 2007 Kansas law provides for development of one state-owned casino in each of four specific zones. Selection of applicants picked isn’t final until they pass a background check and are approved by the Racing and Gaming Commission, which regulates the casinos.
The review board picked Harrah’s Entertainment Inc. for a Sumner County casino, and a partnership of Kansas Speedway and the Cordish Co. of Baltimore for a project in Wyandotte County. On Friday, the board is expected to decide between Butler National Service Corp. and Dodge City Resort and Gaming for a casino in Ford County.
Ed Van Petten, Lottery executive director, said the Lottery Commission might have a special meeting next week to vote on application procedures, including the deadline for taking them. Once applications are submitted, the lottery has 90 days to negotiate contracts.
When Penn pulled out, it blamed the us$ 300 million Quapaw tribal casino in Oklahoma, which is so close to the state line that its parking lot is in Kansas, abutting the land Penn had staked out.
Penn said the minimum us$ 225 million investment required was too high. It also pointed out that the law required it to pay a minimum 22 % to the state and 5 % to local governments, while the tribal casino pays 6 % to the state.
Phil Ruffin Sr., who owns the now-closed Camptown Greyhound Park at Frontenac in Crawford County, said he questions whether anybody would want to compete against the tribal casino and whether there would be lenders because of the economy.
"I don’t think anybody in their right mind would go there. You have a tremendous disadvantage with a very good property over there," Ruffin said. "Besides, there is no financing. It would have to be all cash. This is a tough time for gaming all over the country."