Plans for four state-owned casinos in Kansas already were struggling before the latest economic crisis set in. Now, the chances of any significant state gaming revenue seem to be sinking by the minute.

Harrah’s Entertainment still is moving forward on plans for a casino in Sumner County, but the developer chosen by the Lottery Gaming Facility Review Board to operate a casino in southeast Kansas walked away from the project earlier this month saying it couldn’t compete with an Oklahoma tribal casino on the state line.

Two developers got the state’s OK last week for two more casinos, but not before the once-packed field had dwindled in Wyandotte County and concerns about the size of the proposed Dodge City casino caused two board members to oppose the project.

Kansas Speedway in Wyandotte County has consistently been viewed as the most viable casino site in the state and drew applications from five developers. One developer withdrew last summer citing concerns that a Kansas casino might lose a competitive advantage if Missouri drops its daily loss limit law. Another developer backed out last week citing “current turmoil in the financial markets.” Three developers remained in the running, however, and the state selected Kansas Entertainment, a partnership of Kansas Speedway and Cordish Co. to move forward on the project.

The aforementioned “turmoil in the financial markets” also was part of the discussion as the state board considered proposals for a Dodge City casino. The board chose Butler National Service Corp. reportedly because Butler’s financing plans seemed more solid. The developer had supplied a letter from a Merrill Lynch director saying the lender was “highly confident” it could arrange $45 million in financing for the project.

A couple of board members were less confident, saying they feared the Butler plan was more than Dodge City and its surrounding area could support. The Butler plan calls for an $88 million complex, which is significantly larger than the other Dodge City proposal for a $70 million complex. The larger plans calls for building the casino complex in two phases, the first opening with 575 slot machines and 10 gambling tables in September 2009. The second phase, with a planned opening in 2011, would include 875 slots, 20 tables, restaurants, a convention and a 124-room hotel.

Want to take bets right now on whether Phase 2 will ever be built?

As it turns out, the timing of the 2007 legislation clearing the way for the Kansas Lottery to operate casinos couldn’t have been much worse. The same economic downturn that is affecting the state budget also is making it less likely the state will realize any windfall of casino revenue.

The legislation was a gamble; now it looks like a gamble the state easily could lose.