Thursday, December 6, 2007

Mohegan's Casino Bid Still Alive in Kansas

By Ken Davison

Four Indian tribes currently run casinos in Kansas but a law passed last spring would expand gaming in that state by allowing four new major casino-hotels and 2,800 slot machines at three race tracks.

The legislation allows for one major casino in each of four different regions in the state. Wyandotte County/Kansas City is one of the regions.

A total of five groups submitted proposals to build a casino in Wyandotte County, including the Mohegan Tribe. While the Mohegan Tribe and three other groups received zoning approval from the county this week, the Las Vegas Sands Corporation’s zoning application for a $500 million project was rejected.

These four proposals will go through another round of county government hearings next week regarding the economic and community effects of each proposal and will be voted upon on December 13th by the county, determining which of the proposals will be submitted to the state’s lottery commission. The lottery commission has the ultimate authority to select the winning proposal.

The four groups and the cost of their casinos proposed for Wyandotte County are the Mohegan Tribe and their partners Olympia Gaming and RED Development ($770 million), Pinnacle Entertainment ($650 million), Fox Tribes partnering with Kickapoo-Sac Tribe ($300 million), and the Cordish Company partnering with Kansas Speedway ($600 million). The gaming law states that the minimum investment must be $250 million, which includes a $25 million "privilege" fee.

The Fox Tribes and the Kickapoo-Sac Tribe have reservations in the northeast corner of Kansas along with two other tribes, the Iowa and the Prairie Band Potawatomi. In 2004, Governor Kathleen Sebelius approved a compact with the Fox Tribes and the Kickapoo-Sac for a $210 million casino in Wyandotte County but it was not approved by the legislature. Under the compact, the tribe would have shared casino revenues with the state. The four tribes operating casinos in the state currently do not pay the state any revenues from their casinos.

The Mashantucket Pequot Nation recently announced that it was partnering with MGM Grand and the Iowa Tribe to build a casino in another location of Kansas. The Mashantucket's Foxwoods Development proposal is not in competition with the Mohegan Tribe’s proposal. Mashantucket will be in competition with Penn National, the former owner of the Pocono Downs racetrack in Pennsylvania, and two other bidders in Sumner County.

Under the Kansas Constitution, only Indian tribes and the state can operate casino gambling. The constitutionality of the new gambling legislation is currently being challenged in county court and is expected to eventually go to state court. At issue is whether the casinos can be privately owned or whether they must be owned by the state.