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Kansas City Star, The (MO)
2007-09-01
Section: BUSINESS
Edition: 1
Page: C1

Application filed to run Kansas-owned casino

RICK ALM, The Kansas City Star

Kansas has its first official applicant to operate a state-owned casino. At least a dozen more are expected to follow.

Pennsylvania-based Penn National Gaming Inc., which owns 18 casinos, including the Argosy Casino Hotel & Spa in Riverside, on Friday literally filed a truckload of paperwork with the Kansas Lottery Commission. Penn spokesman Eric Schippers said the state's application form and backup documents ran to 1,500 pages -- and the state required 20 copies.

He said a moving van company delivered the 33 boxes of paperwork to Topeka from company headquarters in Wyomissing, Pa.

Penn is proposing a $295 million casino and 250-room resort hotel complex in Cherokee County, near Interstate 44 in the state's far-southeast corner.

Cherokee County stands to collect $3.6 million a year from gambling taxes alone if the casino meets its business projections. County officials several weeks ago endorsed the plan. Penn officials said the state could rake in $39.6 million a year, while neighboring Crawford County would be in line for $1.8 million.

In its presentation to Cherokee County officials in July, Penn estimated that casino games alone would eventually gross $179.8 million a year based on visits by an average 6,000 gamblers a day -- 90 percent of them from outside the state. Each of the casino's proposed 1,200 slots is estimated to gross $308 a day.

Given the amount of competition in the region, Penn's numbers might be arguable.

"We know there is competition in the area," Schippers said. "There are more than 15 tribal casinos just across the border in northeast Oklahoma."

A 16th tribal gambling parlor and the first casino in the area that possibly would rival Penn's in size and scope was recently proposed by an Oklahoma tribe along I-44 and just inside the Oklahoma border.

But Schippers said, "We will have the premier destination resort casino in that region.

"Our proposal is the best from a strategic aspect. It has great access on I-44, and it's as close as you can get to the Oklahoma and Missouri borders.

"The intent of the act," he said, "is to stop the flow of Kansans spending their gaming dollars in Oklahoma, and try to attract some of that revenue to the Kansas side" from markets in Tulsa, Okla.; Joplin, Mo.; and Bentonville, Ark.

Kansas' casino law, which Gov. Kathleen Sebelius signed in April, requires developers in Wyandotte and Sumner counties and in southeast Kansas to invest a minimum $225 million in the projects. A casino developer in Ford County, including Dodge City, Kan., must invest at least $50 million.

Kansas would be the first state to own Las Vegas-style casino resorts.

The constitutionality of the law was challenged last week in the state Supreme Court by Kansas Attorney General Paul Morrison. The high court has not indicated whether it would consider Morrison's "friendly" filing or wait for other plaintiffs. At least one Kansas tribe with a reservation casino north of Topeka has said it will challenge the law.

Morrison's lawsuit argues that the state's plan to hire casino managers and require them to pay construction and all other operating costs is a sham that violates the Kansas Constitution's requirement for "state owned and operated" gambling.

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