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Casinos probably 3 years from reality 5-2-07

By CARL MANNING
TOPEKA, Kan. (AP) - The Lottery Commission took the first step Wednesday toward having four resort casinos in Kansas, but it could be three years before any of them will be opening their doors.

Acting under the gambling law that took effect last month, the five-member commission unanimously agreed the clock would start running on the 90 days for accepting casino applications after certification of county elections that are required for a community to host a casino.

The commission then will have another 90 days to negotiate contracts with aspiring casino managers for the state and forward them to a yet-to-be-formed, seven-member review board. The review board has 60 days to pick the four casino managers and send those names to the state Racing and Gaming Commission for final approval.

Ed Van Petten, lottery executive director, said the timetable for sifting through applications and coming up with proposed contracts could be extended by Gov. Kathleen Sebelius if there's a flood of applicants.

“I don't think it'll be a major problem,” Van Petten said. “If we get more than anticipated, the governor has said she'd rather do it right than do it quick.”

Absent any glitches, such as delays in getting applications approved, lawsuits or court rulings, casino construction could start next year.

“At the absolute minimum we're talking about a couple of years and realistically three years to get in full operation,” Van Petten said.

But Sebelius said during a news conference that she's skeptical that potential managers will want to submit applications until legal issues surrounding the new law are settled. The Prairie Band Potawatomi Nation, which operates a northeast Kansas casino, has threatened to challenge the law.

“I can't imagine many investment groups willing to put up $250 million-plus until they know if this law is going to stand up,” she said. “We're really 50 steps away from somebody making an application.”

The American Gaming Association says 11 other states have commercial casinos but none with state-run resort casinos like Kansas will have. Twenty-eight states have Indian gambling - 23, including Kansas, with casinos and five with games such as bingo.

The law allows one casino each in Wyandotte and Ford counties, a southeast Kansas zone of Crawford and Cherokee counties and a south-central zone of Sedgwick and Sumner counties. Cherokee County's election is June 5, Wyandotte and Ford counties' on June 26 and Sedgwick County on Aug. 7.

Crawford and Sumner counties already have approved casinos, and Van Petten said those votes probably would be counted, avoiding a second vote. In the two zones, the deadline clock starts after the second election is certified.

Van Petten said the lottery's primary focus on negotiating contracts will be what's best for the state and what will best benefit the areas where the casinos will be located.

The commission also approved an eight-page document spelling out what's required of applicants, including sufficient financial resources to meet the minimum investment requirement, at least three years of experience managing casinos and all taxes paid.

The Ford County casino must have an investment of at least $50 million, and the other three will have a minimum investment of $225 million each. The casinos also must pay a $25 million privilege fee, except in Ford County, where it would be $5.5 million.

At issue with the contracts will be who will manage the casinos, which will be owned and operated by the lottery and regulated by the Racing and Gaming Commission. The state constitution allows a “state-owned and operated” lottery, and the Kansas Supreme Court says “lottery” is defined broadly enough to cover casino gambling.

Van Petten said the commission is on “a steep learning curve” but will rely on the expertise of the casino managers, although it will have the final word on what casinos can do. He said the commission will do a marketing analysis of each application to make sure what is being promised is feasible.

“There's more certainty in terms of a time frame and expectations of documentation for the applications. It's aggressive. In some states the process has taken longer. It's aggressive, but not in a way that it's unfair,” said Doug Lawrence of Ruffin Companies, which owns dog tracks in Wichita and Frontenac.

The Potawatomi tribe, one of four that operate casinos in Kansas, contends the constitution requires the state not only to own the casinos but to manage them directly, rather than delegating management to a private company.

The attorney general's office, at Sebelius' request, is planning a “friendly lawsuit” to get a Supreme Court ruling on the gambling law's constitutionality. No timetable for that has been determined, said spokeswoman Ashley Anstaett.

Not all the tribes oppose the law.

The Sac and Fox and Kickapoo tribes are partners for a bid to operate the Wyandotte County casino.

“We've been ready for years,” said Whitney Damron, lobbyist for the tribes. “They are meeting with potential development partners and will submit a proposal.”
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