LJWorld.com

Topeka — Rumors are circulating that Harrah's Entertainment Inc. plans to withdraw from operating a state-owned casino planned for Sumner County, but the Kansas Lottery's chief said Friday that the company hasn't notified the state of any such plans.

"I consider it a possibility, but I haven't heard anything definite," said Ed Van Petten, Lottery executive director. "We are taking the issue seriously, but there is nothing we can do until we are notified they want to withdraw."

Harrah's spokeswoman Jacqueline Peterson said Friday the company doesn't comment on rumors.

Gov. Kathleen Sebelius said, "I know there's some issues there. We haven't gotten official notification of anything yet. I know there have been some conversations."

Sebelius said she hadn't been involved in the conversations. Asked for more specifics, she said, "They haven't been with me, so I'm not going to talk about conversations I haven't been a party to."

The question about Harrah's future in Sumner County came up during a Lottery Commission meeting Wednesday. Keith Kocher, director of gaming, told the commissioners, "Times are tough in the gaming industry, and rumors are flying."

Spokesman Mike Deines said the state Racing and Gaming Commission, which will regulate the new gambling, also has heard the rumors but has had no conversations with Harrah's.

Biggest casino player

Based on total annual revenue, Harrah's is considered the world's largest casino company, owning or managing 49 casinos.

It's a partner with Sumner Gaming Joint Venture, which includes Kansas investors, in the $535 million facility that includes a 175-room hotel, five restaurants and a casino with 2,000 slots at Mulvane.

Janis Hellard, Sumner County Economic Development Commission director, said, "The rumors have been flying down here. We've been through the rumor mill the last couple of weeks."

Even so, Hellard said she's optimistic Harrah's will remain in Sumner County, noting its Mulvane office remains open.

"When I've checked on the rumors, they have assured us that is not the case, at least not at this time," she said. "The best we can find out, there's nothing to it, but you never know about the future."

Hellard said the rumors started with the nation's economic meltdown, coupled with Harrah's report last week of a $129.7 million loss in its third quarter compared with a $244.4 million profit a year earlier.

Players drop out

Already, four casino companies have bowed out since the Kansas Lottery, which owns the gambling interest, began considering applications for its 15-year operating contracts. The state gets a minimum 22 percent of casino revenue.

A partnership involving MGM Mirage Inc. and Foxwoods Development Co. dropped out of the Sumner County in May while still negotiating with the lottery. In July, Las Vegas Sands Corp. left Wyandotte County, citing increased borrowing costs as a factor.

In September, Penn National Gaming Inc. walked away from its Cherokee County contract, saying it couldn't compete with an Oklahoma tribal casino so close to the state line that its parking lot is in Kansas.

Later that month, Pinnacle Entertainment, Inc. dropped out of Wyandotte County, citing increased borrowing costs as a factor.

An expanded gambling law enacted last year allows four state-owned casino. Contracts for three are awaiting final approval next month by the Racing and Gaming Commission.

Besides Harrah's, also awaiting final approval are a partnership of Kansas Speedway and the Baltimore-based Cordish Co. for Wyandotte County, and Butler National Service Corp. for Ford County.

The Lottery set a Jan. 21 deadline for submitting applications for Cherokee or Crawford county to replace Penn. So far, no applications have been submitted.