Topeka ? A developer abandoned plans Friday to build a state-owned casino south of Wichita and asked for its licensing fee back, creating a new problem for the state as it struggles with its budget.

The St. Louis-based Chisholm Creek partnership had paid $25 million for the right to build and manage a casino for the Kansas Lottery. In similar circumstances in the past, the fee has been returned.

The state couldn’t spend the fee until the casino plan cleared the regulatory process, but state officials who expected the deal to go forward thought the money would be free before July 1 and incorporated it into the current budget.

Chisholm Creek sent a terse letter to the lottery Friday, backing out of the deal. The letter didn’t give a reason, but it came the day after Gov. Mark Parkinson refused to extend the April 19 deadline for a state board to vote on whether the Chisholm Creek project could go forward.

The Lottery Gaming Facility Review Board had asked for a 60-day extension at the request of Chisholm Creek officials. Those officials said they needed to know whether the Legislature planned to rewrite the state’s gambling law in a way that would make their venture less profitable after lawmakers reconvene April 28.

Parkinson said delaying a decision was “not in the best interests of Kansas” and the state needed to know if it could count on the $25 million fee from Chisholm Creek.

The developer had proposed a $225 million casino-and-hotel complex near Mulvane, about 20 miles south of Wichita. Its project would have been the third casino built under a 2007 state law.

With its withdrawal, the Kansas Lottery must reopen its search for a developer — a process could take months or longer.

Keith Kocher, the lottery’s director of gaming facilities, said he will ask the Lottery Commission to reopen the application process when it meets April 23.

The 2007 law authorized one casino in each of four areas. While private developers build and manage them, the lottery owns the gambling rights and equipment, including the cards and dice.

A casino in Dodge City opened in December. Penn National Gaming Inc., of Wyomissing, Pa., and the parent company of Kansas Speedway have cleared the regulatory hurdles to build a casino at the NASCAR track in Kansas City, Kan.

Along with Sumner County, where Chisolm Creek had planned to build, the law authorizes a casino in either Crawford or Cherokee counties in the state’s southeast corner. The lottery hasn’t received any applications for that area.