Friday, June 27, 2008

Kansas Court Upholds Casino Law

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The Kansas Supreme Court today upheld the constitutionality of a 2007 expanded gambling law that allows the state to go forward with its plan to have four large casinos built.

At issue was the Kansas Constitution's requirement that gambling be owned and operated by the state. The state says its control over the distribution of casino revenues and other oversight responsibilities satisfies the ownership requirement.

The court noted the state "will receive gambling revenue, own casino software, monitor electronic games and have the authority to enter into management contracts and supervise casino managers."

Casino developers should own the casino buildings, equipment and will operate the casinos but the Supreme Court case was decided after casino developers signed agreements with the state.

Supreme Court Justice Eric S. Rosen wrotej, "It is unnecessary that the state own the physical plant associated with the lottery. It suffices that the state own the game, or the scheme, or the enterprise. Such a definition is consistent with a standard review favoring the constitutionality of the (law)."

The Mohegan Tribe has partnered with Kansas City-based RED Development and Olympia Gaming of Las Vegas in proposing a $792 million casino in the Wyandotte-Kansas City region of the state. Five groups have submitted a total of six proposals for a casino in Wyandotte-Kansas City, including the group in which Mohegan is a partner.

The Mashantucket Pequot Tribe recently pulled out of negotiations for a casino in another region of Kansas called Sumner County.

Decisions on the winning proposals are expected to be made in September.