- Associated Press - Friday, April 18, 2014

TOPEKA, Kan. (AP) - Gov. Sam Brownback is making it easier for the state to bring a casino to southeast Kansas, despite his personal qualms about expanding legalized gambling.

Brownback announced Friday that he’s allowing a casino bill to become law without his signature. The measure, taking effect July 1, will decrease the investment required for a prospective casino developer to $50 million from the current $225 million. Also, a fee charged by the state to the developer would drop to $5.5 million from $25 million.

A 2007 state law allows a single casino in either Cherokee or Crawford county. The Kansas Lottery would own the rights to the gambling but contract with a private developer to build and run the casino, with 22 percent of the revenues going to the state. The law also allows a single casino each in Dodge City, Kansas City, and the Wichita area, and they’re up and running.

Some GOP legislators oppose gambling for moral reasons or believe it hurts local businesses, and they’ve blocked changes. But this year’s bill dealt only with the southeast Kansas casino and not with bringing slot machines to dog and horse racing tracks, as past proposals have. The measure passed the Legislature earlier this month with strong, bipartisan majorities.

“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,” Brownback said in a statement announcing his decision.

Southeast Kansas legislators were strong supporters of the 2007 law and had hoped that a casino in their area would create jobs and attract tourists from other states. But local officials have said the law set the investment threshold too high to attract interest from developers, particularly during the Great Recession.

“This is going to add hundreds of jobs to the area,” said state Sen. Jake LaTurner, a Pittsburg Republican, who pushed for the bill’s passage. “We are finally righting the ship.”

The lottery could negotiate contracts this fall with multiple developers, and an independent board would pick the developer, subject to approval by the state Racing and Gaming Commission, which regulates the casinos. LaTurner believes construction could begin in 2015.

Area officials have grown increasingly frustrated as they’ve watched the other lottery-owned casinos open, particularly because the 2007 law requires some revenues go to cities and counties. The lottery reported that through March, the casinos had generated nearly $195 million in revenues for the state and nearly $27 million for local governments.

Only one company initially showed an interest in a southeast Kansas casino: Penn National Gaming Inc., of Wyomissing, Pa. However, it walked away from its 2008 contract with the lottery, citing competition from a casino opened by the Quapaw Tribe of northeast Oklahoma. The casino sits so close to the state line that its parking lot is in Kansas.

Tribal casinos have since proliferated in northeast Oklahoma, further dampening interest in a large-scale southeast Kansas project.

“Really, it becomes a math equation, of how much investment can you put in and get a return on that investment,” said former state Rep. Ed McKechnie, of Arcadia, a short-line railroad executive and Kansas Board of Regents member who served 10 years in the House as a Democrat. “The numbers just suggested it wasn’t going to work for that much investment.”

___

Associated Press Writer John Milburn contributed to this report.

___

Story Continues →