Woodlands issues statement regarding Kansas Lottery negotiations

      Woodlands representatives said Tuesday they understand and respect the decision Phil Ruffin Sr. has made regarding his decision to suspend negotiations with the Kansas Lottery.
  (Ruffin is owner of Camptown Greyhound Park in Frontenac, Kan.)
      The Woodlands representatives remain optimistic about the addition of slots at the Woodlands. The conditions in the Kansas City market are different from Camptown’s market, and Woodlands representatives are still exploring the viability of the investment. When the Woodlands has gathered and analyzed all the facts, plans are to finalize the agreement and sign the contract with the Kansas Lottery.
        “We must be diligent to ensure, based on our investment decisions, that our company, the State of Kansas and the horse and dog industries are successful,” said Larry Seckington, an executive for the Woodlands. “We are by no means discouraged, but we are cautious. We are receiving information daily, and our plans are to craft a solution that best fits our market environment in current regulatory constraints.”
        The addition of the slots has been a long time coming for the Woodlands, and the ownership, management and staff at the Woodlands are extremely excited about the future.

Will stakes be too high for some gaming bidders?
by Mary Rupert
        As the bidding gets a bit more steep for expanded gaming in Wyandotte County, there is talk about some bidders folding. But as of earlier this week, all parties for expanded gaming in Wyandotte County were still at the negotiating table, according to Sally Lunsford, spokesman for the Kansas Lottery.
        That's not true in other parts of Kansas. The Camptown racetrack in Frontenac walked away from the negotiating table last week for an exclusive racino in southeast Kansas, saying there wouldn't be enough revenue from it. Lunsford said they left on friendly terms. Gaming operators would have to pay all expenses of gaming, as well as turn over a percentage of the profits to the state, according to state law.
        Lunsford said the Lottery is following the state laws that set out percentages of revenue that each will receive. The law also mandates that operators pay for the equipment and costs.
        "They want the state to take another look at the situation, which would require the Legislature to do that," Lunsford said. "We have to do what the law says we have to do."
        According to the state law, 25 percent of the net revenue goes to the operator, and 40 percent to the state. Another 15 percent, under the law, is earmarked for "gaming expenses, subject to agreement between the Kansas lottery and the racetrack gaming facility manager."
        There's also a minimum bid operators pay of $2,500 per slot machine, according to the state law. Slot machines would have to pay out at least 87 percent of the amount wagered per machine, under the law.
        Contract negotiations with the casino developers also are continuing this week, according to Lunsford. The Lottery and developers are reportedly negotiating contracts where the state could receive more than the minimum of 22 percent.
        "Casino applicants are not being asked to bid more than 22 percent," Lunsford stated in response to a question. "However, Lottery negotiators expect that there will be developers who will offer more to improve their chances of being selected as the successful applicant to receive a casino management contract. Lottery negotiators have made developers aware of this possibility since the beginning of negotiations."
        According to Lunsford, a 33 percent figure contained in a Lottery e-mail and reported in The Kansas City Kansan was not an agreement but part of working papers. The 33 percent would include 28 percent to the state, 3 percent to local governments and 2 percent for problem gambling fund, and would be only for revenues exceeding $250 million per year, according to Lunsford.
A contract agreement with Penn Gaming in southeast Kansas also refers to the 67 percent which the lottery gaming facility manager would receive on all revenues that exceed $250 million, Lunsford stated. The percentage is based on the amount of the revenue, rather than a number of years, she added.

Destination casinos next on the schedule
        Destination casino developers' presentations from Wyandotte County will be May 19-20 in Topeka.
In all, there are five approved destination casino applicants in Wyandotte County: Pinnacle-Kansas (PNK), at the Schlitterbahn, Kansas Entertainment LLC at the Kansas Speedway, and Legends Sun, in Kansas City, Kansas, and two, Golden Gaming and Sands Kansas LLC, in Edwardsville.
        Earlier this week, the Lottery Commission approved the first contract in the state, with Penn National Gaming, for Cherokee County in southeast Kansas, according to Lunsford. It was the only applicant there. While the state law requires an investment of $225 million for the southeast area casino, the contract approved allows Penn National to develop the casino in phases over 12 years, starting with an initial investment of $125 million, according to Lottery information. Penn National will pay a privilege fee of $25 million to the state within the next month.
        Under that contract, the state will receive 22 percent of the gaming revenue, with Cherokee County receiving two percent and Crawford County, one percent, according to information from the Lottery.
        The Penn National project will be called the Hollywood Casino, and is near U.S. Highway 166 and I-44. It is expected to be open by May 2010, and will include the casino, 225-seat buffet, 30-seat coffee shop, gift shop and entertainment lounge, according to information from the Lottery. The casino will have 900 machines and 30 tables. It is expected to employ 510 people. Other buildings, including a hotel, are planned later.

Gaming Timeline
        • May 14 -- Kansas Supreme Court hears test case on constitutionality of new gaming law. Decision expected to take at least six weeks.
        • May 19-20 -- Destination casino proposals to be presented to the Lottery Commission at the Capitol Plaza Hotel in Topeka. Wyandotte County proposals are expected to be heard from late morning to the afternoon of May 20. A more detailed schedule for presentations is expected to be available soon at this Web site: http://www.kslottery.com/ExpandedLotteryAct/ExpandedLotteryActInfo.htm.
        • May 27 -- Deadline for Lottery Commission to negotiate contracts with developers. After contracts are negotiated, they will be sent to the Lottery Gaming Facilities Review Board and one may be selected for Wyandotte County.
        • July 11 -- A lawsuit against the Lottery by Kansas City, Kansas, taxpayers is assigned for setting or dismissal in Shawnee County District Court. The lawsuit alleges tax-increment financing, sales tax revenue bonds or other public financing was used by the marketing partners of three proposed KCK casino sites, allegedly against state law. A Unified Government spokesman previously has stated the UG believes it is not against the state law for a development next to the casino to use public financing.
        • September -- The Lottery Gaming Facilities Review Board is expected to select one of the casino applicants from Wyandotte County.