PITTSBURG, Kan. — Pittsburg city officials and community leaders say they are happy with their partnership with Kansas Crossing Casino & Hotel, even though the casino fell short of its projected gaming revenue.
When the casino was recommended by the Kansas Lottery Gaming Facility Review Board in 2015, Kansas Crossing's projected total gross gaming revenue was $47.2 million annually.
However in 2018, the business made $34.3 million, according to officials with the Kansas Racing and Gaming Commission, which is $12.9 million, or 27 percent short its original goal.
Crawford County, Cherokee County and the city of Pittsburg each receive 1 percent of the casino’s overall revenue as part of an agreement.
“I don’t care what projections they had when they were bidding against the other competitors because I’m pretty sure everyone had their pencils out and were dialing out the best number they could come up with,” Daron Hall, Pittsburg city manager, said last week. “For us, it’s the simple matter of seeing how they opened and then what they’re trending now. Their trending is up considerably from month to month, year to year.”
Kansas Crossing also said they would provide 300 jobs once in operation; employment is more than 275, said Ryan Stewart, the casino’s marketing director.
Casino officials did not provide a response, however, to questions about 2018 revenue and its earlier projection.
“Year over year, KCC’s revenues have shown steady increases, and both our ownership and lottery are pleased with our growth,” Stewart said in an email to the Globe.
Fred Waller, an enforcement agent with Kansas Racing and Gaming Commission, said casino projection goals aren’t a state requirement and most new casinos end up having similar challenges. KCC faces nearby competitors in Oklahoma, which recently legalized ball and dice games in its casinos, and that may be impacting the numbers, Waller added.
Kansas Crossing also fell short of projections by two state-hired consultants that assessed revenue potential when the state was selecting a casino for Southeast Kansas. Union Gaming Analytics of Las Vegas predicted that Kansas Crossing would realize $39 million annually; Cummings Associates of Arlington, Massachusetts, predicted $36.6 million for Kansas Crossing.
As part of its proposal, Kansas Crossing also agreed that it would secure partnerships valued at more than $4.5 million over the next 10 years with Pittsburg State University, the Southeast Kansas Career and Technical Education Center, and the Southeast Kansas Tourism Group.
All three community partners said the projection loss has not impacted the casino’s contributions.
Kris Mengarelli, executive director of CTEC, said the center receives $400,000 a year or up to $100,000 quarterly. The education center could also potentially earn more, if 1 percent of the casino’s gross income reaches more than $100,000.
“It’s been nothing but positive for us here at CTEC,” Mengarelli said. “They give us $100,000 or a certain percentage of their gross income, whichever is higher. We have received $100,000 every quarter from the day they promised us that.”
CTEC uses that revenue for scholarships for students throughout Crawford County. Mengarelli said they have about 220 students who are currently enrolled with the program and they’re working to establish an endowment fund with casino donations for future scholarships.
Shawn Naccarato, PSU’s chief strategy officer, said they receive $50,000 each year as part of their agreement. The school is in the process of finalizing a new, multiyear agreement with the casino on how the dollars will be used to advance the university’s mission.
"We've had a positive relationship with Kansas Crossing since the beginning and have no reason to doubt they'll continue to be a good partner with us," Naccarato said.
Crawford County Convention and Visitors Bureau is the last community partner to benefit from the casino, which is a member of the SEK Tourism Group that receives funds for regional marketing.
“They have been fantastic partners and have provided our group with financial assistance each year to market Southeast Kansas as a regional tourism destination,” said Devin Gorman, executive director of the Crawford County CVB. “With that, we also promote the casino, which allows us to attend trade shows.”
Gorman also said the casino has played a large role in developing county tourism, which has seen a 25 percent growth in hotel stays in both 2017 and 2018.
“In conjunction with the casino, the Hampton Inn opening up a 123-room hotel — the largest hotel in the area — has had a tremendous impact on tourism,” he said. “There have been about 16,000 room-nights in 2017, and it will be pretty close to that for 2018.”
Kansas Crossing Casino, at the intersection of U.S. Highways 69 and 400 in Crawford County, was chosen over two others: Castle Rock Casino Resort, which would have been on U.S. 400 near Interstate 44 in Cherokee County near Downstream, and Camptown Casino, which was also planned for Crawford County.