By Roger McKinney

rmckinney@joplinglobe.com

TOPEKA, Kan. — Kansas lottery officials on Friday voted 4-3 to approve a contract with Harrah’s Entertainment for a state-owned casino and hotel in Sumner County. The vote was 5-2 in favor of approving Penn National Gaming’s contract for a state-owned casino in Cherokee County, but company officials have said they may pull out of that project if they did not also get the contract in Sumner County.

Eric Schippers, public affairs vice president for Penn National, said whether to go forward in Cherokee County would be decided by the company’s board of directors and that there was no time frame set for a decision.

Peter Carlino, Penn National’s chairman and chief executive officer, said during a July 24 conference call that it would be two casinos or none in Kansas and that a casino in Cherokee County didn’t make business sense on its own. Schippers said Friday that was management’s position, but the board makes the final decision.

Penn National’s project is challenged by Downstream Casino Resort, a $301 million project of the Quapaw Tribe of Oklahoma off Interstate 44, where Oklahoma, Kansas and Missouri meet. That casino opened last month, with a 12-story hotel set to open in the fall.

Penn National proposed building a $125 million casino north of Downstream, with a 225-seat buffet, a coffee and pastry shop, a gift shop and entertainment lounge and bar. It proposed hiring 510 workers. Another $100 million investment is to be phased in over 12 years.

The project is scaled back from an initial $295 million proposal. Company officials said the reason was competition from Downstream.

Kansas Lottery Gaming Facility Review Board members Jack Brier and Bob Boaldin voted against Penn National in Cherokee County, despite having the only contract.

Boaldin said he felt Penn National was trying to pressure the board to accept its contracts in both regions. Brier said he is an optimist.

“I frankly believe there is a better contract out there,” Brier said.

Stephen Martino, executive director of the Kansas Racing and Gaming Commission, said if Penn National withdrew from Cherokee County, the bidding procedure would start over for a casino in either Crawford or Cherokee counties.

Board member Jim Bergfalk said if Penn National followed through in Cherokee County, it could benefit from a “clustering effect.”

“The bad news is Downstream,” Bergfalk said. “Perhaps the good news is Downstream.”

“The project holds great promise in a number of ways to an economically deprived area of our state,” said board member Jackie Vietti about Penn National’s contract in Cherokee County.

The winning proposal in Sumner County was from a joint venture of Harrah’s Entertainment and Sumner Gaming and Resorts. The $490 million project calls for building a casino and hotel at Mulvane. It would employ 1,187 people.

Penn National had proposed a $340 million casino and hotel at Wellington, with 1,100 employees.

Also competing in Sumner County was Marvel Gaming, with a proposal for a $368 million casino and hotel at Wellington.

Only board member Garry Boston supported Penn National’s proposal in Sumner County, saying the company’s southern strategy had merit.

Board members Matt All, Vietti, Brier and Dean Ferrell supported Harrah’s proposal.

All said in a news conference following the votes that he wasn’t persuaded by Penn National’s assertions that having both contracts would increase revenues to the state. He said he didn’t begrudge Penn National for how it handled the situation, saying they were business decisions.

He said he couldn’t predict if a developer would submit a new proposal for the Southeast gaming zone should Penn National withdraw. He said he thought that might be more likely because developers previously weren’t aware that they could complete projects in phases.

Cherokee County Commissioner Rodney Edmondson said by phone Friday that he hopes Penn National follows through with what it proposed in Cherokee County.

“Only time will tell,” Edmondson said. “I guess we’ll see.”







Cross that bridge

David Cooper, Cherokee County’s attorney on gambling issues, said he was pleased that the state board approved Penn National in Cherokee County. He said he has received no word about Penn National’s next move.

“We will certainly be making that inquiry to them,” Cooper said. “It remains a valuable license.”

Cooper and Cherokee County Commissioner Rodney Edmondson said there had been no further discussion about taking legal action against Penn National if it withdraws its contract. Cooper is paid by the county, but the county is reimbursed for his services by Penn National.

“We’ll cross that bridge when we come to it,” Cooper said.