The Kansas Lottery Gaming Facility Review Board that will select one of the three groups competing to develop a state-owned casino in Southeast Kansas held the second of four meetings on May 29 in Topeka. Each group proposing a casino recently paid .5 million in refundable application fees. The final decision on still is several weeks away.
Las Vegas billionaire Phil Ruffin is promoting the $78.5 million Camptown Casino at the former Camptown Greyhound Park in Frontenac, which Ruffin owns, in Crawford County. The $64.7 million Kansas Crossing Casino and Hotel is proposed at the northwest corner of U.S. Highways 69 and 400 in Pittsburg, also in Crawford County. The $140 million Castle Rock Casino Resort would be located in Cherokee County along U.S. 400 near Interstate 44.
Consultant Scott Cooper, former general manager of the Kansas Star Casino near Wichita, previously told the board Camptown would hire 90 percent of its employees locally and give 90 percent of construction costs to local subcontractors. The casino is projected to create 250 jobs. “We’re going to have local, Kansas-based subcontractors,” Cooper said. He added Camptown would have a projected 950,000 visits a year or 2,600 a day. Frontenac is the second largest city in Crawford County; household income there is about $14,000 below the state average.
Frontenac City Administrator Doug Sellars said a Frontenac casino could more than double the city’s property tax revenue. “Every taxpayer in Frontenac would benefit,” he stated said. Mayor James Kennedy added, “What I’m interested in is the employment.”
Earlier Crawford County Clerk Don Pyle said a casino located in Crawford County potentially could raise county valuation by 8.78 percent, or about $400,000 in increased property taxes. “This doesn’t count sales taxes and things like that, because I don’t think casino revenues have a sales tax applied, but retail, like food and drink, would be taxable like any other place. Unless you’re pretty knowledgeable on the estimates, it’s pretty hard to come up with a good number,” Pyle said.
Castle Rock Casino Resort developers faced concerns about a report commissioned by the Crawford County Convention and Visitors Bureau and compiled by Jay Sarno & Associates stating revenue projections appear to be “vastly overstated,” constructions costs are underestimated and the number of employees is overstated by nearly 50 percent. B.J. Harris, director of the bureau, said, “We need to make sure the successful casino applicant can actually build and operate a facility that is the best for this market.” In response, Castle Rock officials questioned if the report was biased. Castle Rock investor Bennie Crossland, president of Crossland Construction Company of Columbus, said if Sarno figured the numbers the same way for the two Crawford County casino proposals, those casinos “would not be viable. We are confident that our construction numbers are accurate and on target,” Crossland said.
No matter who ends up operating the casino, it is expected to impact the nearby Downstream Casino Resort, operated by the Quapaw tribe in Oklahoma. Analyst Peter Trombetta report in March in Moody’s, “Based on our estimates, a 10 percent drop in EBITDA—not unheard of in markets where new competition opens close by—would reduce Downstream’s cash flow after interest and maintenance capital expenditures to about $14 million.”
Downstream spokesman Sean Harrison said the tribe disagrees with Moody’s report. “And we feel strongly—in fact we know—that the only good decision for Southeast Kansas is to build in Crawford County, where it stands a chance. Everyone should be more worried about what’s good and right for the citizens of Southeast Kansas than what’s going to happen with Downstream or the other Indian casinos, if Castle Rock ends up with the state license.”
