After a day of questioning applicants, a Kansas review board planned to vote Friday on which companies will manage state-owned casinos in Cherokee and Sumner counties.
On Thursday, the seven-member Lottery Gaming Facility Review Board questioned three applicants vying for the Sumner County contract — Harrah's Entertainment Inc., Penn National Gaming Inc. and Marvel Gaming. Penn is the sole applicant for Cherokee County.
Harrah's casino would be in Mulvane, while Penn and Marvel have staked out locations near Wellington.
Board chairman Matt All said he wouldn't be surprised by votes that weren't unanimous on the final selections. Kansas law requires the board to consider which contract will bring the state the most revenue, best promote tourism and be in the best interest of the state, he said.
"We have to follow the law, and following the law, and doing what the law requires us to do, is different from doing what we want to do," All said. "We may want to vote for a particular facility, but the law requires us to vote for another, or we may want to vote for a particular casino but the law requires us to send it back for more negotiations."
The board has the option of rejecting all applicants and sending their proposed contracts back to the Kansas Lottery for more negotiations. The Lottery will own the new casinos.
Any applicant selected by the review board would still undergo a background check by the Kansas Racing and Gaming Commission.
The review board votes Sept. 18 and 19 on four applicants for Wyandotte County and two for Ford County.
Much of Thursday's discussions focused on how each applicant would finance its project. All three applicants said they had the financial ability to build and operate the casino over the life of the 15-year contract, and the board's consultants agreed.
According to Lottery officials, Harrah's said earlier that it wanted to change the contract it signed in May to remove about $50 million in proposed retail facilities.
Dan Biles, the Lottery' attorney, said the idea was rejected because it wouldn't be fair to the other applicants. He said Harrah's and other applicants are bound by the terms of the contracts they signed with the Lottery.
Harrah's later called the situation a misunderstanding and that there never were plans to cut back.
"It's no longer an issue. We solved it in a different way," said Charles Atwood, vice president of Harrah's board.
Penn continued to push what it called its "southern strategy" — casinos in both Cherokee and Sumner counties. Steve Snyder, Penn senior vice president for corporate development, said operating both casinos would generate more revenue than two facilities with different managers.
But consultant William Eadington, of the University of Nevada-Reno, said, "I don't place much credence in the southern strategy. It's probably overstated as presented."
Snyder again told the board that Penn would move forward in Cherokee County if it gets the Sumner County contract but would have to rethink its position if that didn't happen.
A new casino that opened on the state line by Oklahoma's Quapaw Nation this summer is expected to cut into Penn's potential revenue.
Consultants estimate first-year revenue in Sumner County at $186.5 million for Harrah's, $132.6 million for Marvel and $123 million for Penn. Harrah's and Marvel initially would pay 22 percent of their revenue to the state while Penn would pay 25 percent. They would pay more as revenues increase.
In Cherokee County, consultants estimate revenue for Penn at $30.2 million, and the state's share would be 22 percent. Penn had projected revenues of $57.4 million.
The move toward state-owned casinos started last year with passage of the Kansas Expanded Lottery Act. After the contracts were signed with the Lottery in May, the review board conducted public hearings and meetings.
In June, the Kansas Supreme Court ruled that state would truly own and operate the new gambling, ending any constitutional question about the new law.
Voters amended the state Constitution in 1986 to allow a state-owned and operated lottery, and the court said in 1994 that the term "lottery" is broad enough to include slot machines and other casino games.


































