Topeka Developers of a casino in Kansas City have asked legislators not to change the rules governing gambling in Kansas to benefit a potential competitor to the detriment of their $386 million project.
Kansas law allows slots at three dog and horse racing tracks. But the tracks’ owners say the state’s take of their slot revenue has been too great, and all three tracks remain closed.
Bills have been introduced in the House and Senate to reduce state and local governments’ share of the slot revenues, revitalize the tracks and expand gambling. The proposals would reduce the state’s share of gambling revenues from 27 percent to 22 percent to increase the tracks’ profit margins and share the money with breeders and associations statewide.
But the developers of the casino at the Kansas Speedway object, saying the contract they negotiated with the Kansas Lottery could be in jeopardy if the law is changed.
Kansas Entertainment LLC is particularly concerned because one of the tracks is The Woodlands race track, just a few miles from the proposed casino site. Kansas Entertainment is a partnership between Penn National Gaming, Inc., and Kansas Speedway. The partnership wrote a letter to Gov. Mark Parkinson and legislative leaders saying changing the law would affect the gambling market in northeast Kansas.
“Anyone requesting to change the rules at this juncture should have done so when the law was written in the first place,” wrote Thomas Auriemma, president of Penn Hollywood Kansas, the managing member of the venture.
But legislators say the fact the state is looking for additional revenue and economic development is reason to consider changing the law.
Sen. Pete Brungardt, a Salina Republican and chairman of the Senate Federal and State Affairs Committee, said reducing the amount tracks pay could encourage them to open new venues for Kansas dog and horse breeders to compete and foster continued growth in the state’s agriculture.
“That’s always been part of the interest I’ve had,” said Brungardt, who will hold hearings on the Senate proposal on Feb. 9.
Karen Bailey, a spokeswoman for Penn National, said there is no truth to speculation that the letter is an indication the project’s finances are in trouble. But the deal was made with the understanding that tracks and casinos would both pay the state 27 percent of their revenue.
“Changing the rules in the middle of the game is just not fair,” Bailey said.
Mike Taylor, a lobbyist for the Unified Government of Wyandotte County and Kansas City, Kan., said the local government objects to the bill because it could mean not only a delay in construction, but lawmakers could decide to eliminate the money local governments receive from gambling.
The law gives 1.5 percent of the revenues to the host county government and 1.5 percent to the closest city. In this case, the unified government would get 3 percent.
Bailey said final background checks and approval of the contract is expected in February and ground would be broken in the spring. She wouldn’t say whether Kansas Entertainment would back out if the law changed.
A casino that opened in Dodge City in southwest Kansas in December is the only one now operating Kansas.
Brungardt said the notion that Kansas Entertainment would walk away shouldn’t deter legislators from debating the proposal, especially if the entire state can benefit from the change.
“Something will get built there,” he said. “That’s just too hot a property.”