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Archive for Thursday, December 2, 2010

Criminal case an issue in Kansas casino decision

December 2, 2010

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— A criminal case in Iowa became a complication Wednesday for a Kansas board that will pick a developer for a state-owned casino south of Wichita because misdemeanor charges are pending against two executives in one of the two rival applicants.

The Kansas Lottery Gaming Facility Review Board is reviewing competing proposals from Peninsula Gaming, based in Dubuque, Iowa, and Global Gaming Solutions, of Ada, Okla., which is owned by the Chickasaw Nation. Kansas law allows only one casino in the Wichita area, and the review board plans to pick an applicant Dec. 15.

Supporters of Global's proposal are suggesting that the legal problems facing two Peninsula executives in Iowa should disqualify that company. Martin Brent Stevens, its president, and Jonathan Swain, its chief operating officer, were charged in October with two misdemeanor counts each of violating Iowa's campaign finance laws.

Peninsula officials said the company would address the criminal case during the Kansas review board's meeting Wednesday. Both men have pleaded not guilty to the charges, which involve accusations that their company made donations in the name of others to Democratic Iowa Gov. Chet Culver's unsuccessful re-election campaign.

Kansas review board members struggled with how the criminal case should affect their decision. One consultant hired by the board said Kansas officials have to consider it in deciding whether Peninsula's project should go forward rather than Global's. But review board Chairman Matt All said such issues are better left to the Kansas Racing and Gaming Commission, which will check the background of any successful applicant and regulate the casino.

"We just want to make it fair," All said of the selection process. "We're not qualified to take up those issues."

The review board plans to decide Dec. 15 which applicant to pick. The rights to the new gambling and the equipment at the casino will be owned by the Kansas Lottery, and the state will receive 22 percent of the revenues.

The criminal case complicates the review board's work because, even if it picks Peninsula, the Racing and Gaming Commission, as the regulator, must sign off after conducting a background check. Consultants hired by the review board have projected that Peninsula's project would generate more revenue because its site is closer to Wichita.

Peninsula wants to build its casino near Mulvane, about 18 miles south of Wichita, while Global Gaming's site is near Wellington, about 35 miles south of Wichita. The casino must be in Sumner County because voters in neighboring Sedgwick County, home to Wichita, rejected the idea.

Review board consultant William Eadington said its members need to ask about the criminal case in Iowa because, "choosing an applicant is a bit like committing to a marriage."

"The charges that have been brought in Iowa with respect to key executives within Peninsula have to be taken into consideration by the review board," Eadington said. "Sometimes there are uncomfortable questions that need to be asked."

Stevens and Swain each face one count of making a contribution in the name of another and one count of failing to disclose a contribution. They're scheduled to go to trial Jan. 5 in Polk County District Court but have asked for a 60-day delay, with their attorney saying he needs more time to take statements and evaluate evidence.

Kansas review board members were cautious in discussing the criminal case, saying they need more information about it. But All said he's "troubled" by the idea of considering it because, under state law, the review board is supposed to evaluate which proposal would be better for the state, leaving regulatory issues to the Racing and Gaming Commission.

"I don't think anyone would disagree that issue should be considered in the overall process," All said. "I think we just have to make sure that we're doing the role the Legislature gave us and not anybody else's role."

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