Kan. lottery considers high-priced, lavish casinos

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By CARL MANNING

Associated Press Writer

TOPEKA, Kan. (AP) -- The potential glitz of buzzing slot machines was drowned out by the recession Wednesday as state officials heard proposals from companies that want to operate state-owned casinos in Kansas.

The Kansas Lottery Commission is negotiating contracts with two applicants that want to run a casino in Wyandotte County and three looking at a casino in Sumner County. Their plans come after the companies originally awarded the contracts walked away last year, blaming the tanking economy.

The new applicants are offering less talk about amenities -- though they still plan lavish hotels and casinos -- and more assurance that they have the money to move forward.

"It's a good market and once the economy picks up, it'll be even more profitable," said Damon Schramm, vice president of Lakes Entertainment, which submitted a $317 million proposal for a hotel and casino in Sumner County.

Of the 13 states with commercial casinos, Kansas is the only state with state-owned casinos. Under a 2007 state law, four counties can have one casino each. The only casino being built is in Dodge City, and it's scheduled to open in November.

Plans fell apart last year when a partnership between Kansas Speedway and Baltimore-based Cordish Co. pulled its $700 million proposal for Wyandotte County. Las Vegas-based Harrah's Entertainment walked away from its $535 million plan.

Fewer proposals have been submitted this year and all call for building in phases, unlike last year. Also new this year: less talk about the glitzy appeal of casinos.

The Speedway partnership offered a new proposal for Wyandotte County that includes a Hard Rock Hotel and Casino overlooking the speedway's No. 2 turn. The $521 million plan calls for a casino with 3,000 slots to be built first, followed by a 300-room hotel.

The plan includes commitments for a second NASCAR Sprint Cup race, construction of a road course in the infield, and hosting of Grand-AM Rolex Sports Car races. It also offers $306 million in various expansions -- but only when the partnership decides that market conditions are right, said Speedway president Jeff Boerger.

Penn National Gaming Inc., of Wyomissing, Pa., also wants to build in Wyandotte County. Its plan would spend $539 million to build a Hollywood-theme casino with 3,000 slots and a hotel with as many as 500 rooms. Company spokesman Eric Schippers said the proposal is "a reflection of the state of the economy."

"You're seeing the impact of the economy in terms of numbers of bidders and proposals," he said.

This is Penn's third venture into Kansas. Last year, it lost out in Sumner County to Harrah's and walked away from the contract it was awarded for the Cherokee County casino because of competition from a nearby Oklahoma casino.

Three bidders have plans for Sumner County south of Wichita.

Lakes Entertainment, of Minnetonka, Minn., proposes in its $317 million plan a 250-room hotel and a casino with 2,000 slots at either the Mulvane or Wellington exits off Interstate 35.

A $225 million proposal was submitted by Topeka-based South Central Gaming Partners, whose partners include Peter Simon and Robert Ensign, former executives with the Las Vegas-based Mandalay Resort Group. The South Central plan calls for a casino with 2,000 slots and a 180-room hotel.

Foxwoods Development's plan carries the same price tag. The company, based in St. Louis, proposes at least 1,300 slots in the casino and is negotiating with a third party to build a hotel rather finance it itself.

"That's clearly a money issue. We're proposing to put our money in the casino," said Foxwoods President Gary Armentrout.

Armentrout said his group and South Central are forming a partnership so each would have a percentage of the other's proposal in Sumner County. Even so, each is moving forward with its own proposal to the state. Both groups said they have the money to back their projects.

"The economy today is such that you need to reach out and form partnerships. It shows the state we can build with all cash," Armentrout said.

The commission will decide June 25 how many contracts to forward to a review board that will make the final selections. Last year, the commission didn't reject any of the 11 contracts it negotiated.

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