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Archive for Wednesday, April 30, 2008

Kansas’ revenue from gambling less than projected, report says

April 30, 2008

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— Four state-owned resort casinos and slot machines at race tracks could generate up to $739 million in annual revenue even if two Indian casinos operate near the border in Oklahoma, a study prepared for the Kansas Lottery concluded.

The estimate assumes the Quapaw casino will operate south of Cherokee County and the Pawnee tribe will have a casino south of Arkansas City. Without the two casinos, the study said annual revenues could reach $811 million.

With the two Oklahoma casinos, Kansas' share of gambling proceeds could amount to $180 million a year, and $196 million without them. Both casinos are being built.

Supporters of expanded gambling estimated last year that the state would realize $200 million in additional annual revenue.

A law enacted last year allows casinos in Wyandotte, Cherokee, Sumner and Ford counties and slot machines at the Woodlands dog and horse racing park in Kansas City and Camptown Greyhound Park in Frontenac. The casinos will be operated by developers under contracts with the Lottery.

The state will receive at least 22 percent of gross revenues from casinos and 40 percent from slots at the tracks. The study estimates $98 million in track revenues each year.

Keith Kocher, the Lottery's director of gaming, said Tuesday that the study based its conclusions on certain assumptions, including that all casinos will be operating two years after the slots at the tracks start - something Kocher doesn't expect to happen.

It also assumes slot revenues at the tracks will decrease after the casinos open.

"When you don't know how long it will take the casinos to be built, you have to make some assumptions, like the casinos will come on line two years after the tracks," he said.

As for whether the study's estimates are too high or too low, Kocher said, "You hear it both ways, depending on who you're talking to."

He said the contracts could be negotiated to include a higher percentage for the state.

"It is our intent and desire to obtain as much for the state of Kansas that we can," Kocher said. "We expect there will be higher offers than 22 percent."

Eleven other states have commercial casinos, but Kansas is the only one with state-owned operations.

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