Happy Thanksgiving from GGB; Newsletter Returns December 4

Kansas Lowers Southeast Casino Investment Minimum

In an effort to attract a casino developer to southeast Kansas, Governor Sam Brownback, despite his personal reservations, let a bill become law that will lower the minimum casino investment requirement from $225 million to $50 million, and drops a development fee from $25 million to $5.5 million. The bill will take effect July 1.

Despite his personal feelings about gambling, Kansas Governor Sam Brownback recently allowed a bill to become law without his signature that will lower the minimum required casino investment from 5 million to million. In addition, a development fee will drop from million to .5 million. The law, which will take effect July 1, will make it easier for a developer to build a state-owned casino in Cherokee or Crawford County.

Brownback noted, “While I have reservations about state ownership of casinos in general and the quality of regional economic development associated with casino gaming, many in southeast Kansas have expressed their desire for this change.”

A bill was approved in 2007 to allow a single casino in Dodge City, Kansas City and Mulvane. The Kansas Lottery reported those casinos had generated nearly $195 million in revenues for the state and nearly $27 million for local governments through March.

But southeast Kansas officials have said the law required too high an investment to attract developers, especially in the recent economy. Another issue has been the proliferation of tribal casinos in northeast Oklahoma. A private developer would build and run the casino under a contract with the Kansas Lottery, which would own the rights to the gambling. The state would receive 22 percent of the casino revenue.

State Senator Jake LaTurner said, “This is going to add hundreds of jobs to the area. We are finally righting the ship.” He added the lottery could begin negotiating contracts with multiple developers this fall. An independent board would pick the developer, subject to approval by the state Racing and Gaming Commission, which regulates the casinos, and construction could begin in 2015.

Penn National Gaming had expressed interest but walked away from its 2008 contract with the lottery due to competition from the Quapaw Tribe’s casino in northeast Oklahoma, which sits so close to the state line that its parking lot is in Kansas.