With the state of Kansas looking to overcome a $400 million budget deficit, legislators in southeast Kansas think they have a way to help soften the blow.
And, it involves bringing back an oldie but a goodie.
Expanded gaming.
While the law allowing for expanding gaming is already on the books, bringing destination casinos to fruition has been a struggle.
On Friday, the Kansas Lottery reported that there were no new applications from developers seeking to manage a casino in the Southeast Gaming Zone (Cherokee and Crawford counties) and that the deadline has been automatically extended to 2 p.m. April 16.
So, Rep. Julie Menghini, D- Pittsburg has proposed a measure that would possibly help get a casino in southeast Kansas.
Her bill proposes lowering the minimum investment required by casino developers and managers to build and operate as well as drop the amount of privilege fee paid to the state.
Currently, in the southeast Kansas zone, as proposed by Senate Bill 66, casino managers have to make a minimum investment of $225 million with a privilege fee of $25 million to the state. Menghini’s proposal lowered those minimums to a $50 million investment and $5.5 million fee — similar to that of the Ford County casino, the only one of the four zoned casinos that has opened.
That has been the biggest stumbling block in developing plans to bring casinos to south central, northwest and southeast Kansas. In southeast Kansas that is made more so with the recent opening of Downstream Casino along U.S. 44 highway south of Galena.
“This should be an intermediate investment, not the high end,” said Bob Knight, a partner with Ozark Trail, LLC. “Unless you see a change with the state, I don't know that you will see anything happen.”
Ozark Trail, LLC had their application for a casino in the southeast Kansas zone rejected because of questions regarding the funding mechanism for the fees.
But, Menghini said that now is an excellent time to revisit the measure because of the state’s tough economic times.
“I think last year as well as this year, there would be a majority of votes to make these changes,” Menghini said. “Frankly, we are in an even worse budget situation that we were in last year and I think the financial situation coupled with the Dodge City casino being open helps.”
In addition, Reps. Doug Gatewood, D-Columbus and Bob Grant, D-Cherokee, will submit a bill similar to Menghini’s next week.
Their proposal also lowers the portion of money race track operators like Phil Ruffin, Sr., owner of Camptown Greyhound Park in Frontenac, pay to the state, thus making slots more profitable.
Under the current provisions, race tracks would pay the state 40 percent of their earnings from slot machines. The bill authored by Grant and Gatewood lowers that to 22 percent — exactly what casinos would pay the state.
“We recognize that 22 percent of something is better than 40 percent of nothing,” Gatewood said. “We don't think the 40 percent is feasible and the track operators don't either. The casino's rate is 22 percent to the state and our proposal would make the tracks competitive.”
While the Gatewood-Grant bill does reduce the investment and fee paid to the state, Gatewood said that, tossing in the recent track record of gaming bills in the House and Senate, he is apprehensive to say that, in this session, it will be looked at more seriously by leadership.
“It has moved so slow in the past and I would be apprehensive to say that it would move fast, but with the revenue constraints we are in, it would give the race tracks and casino management companies a chance to get a proposal on the table that much quicker,” Gatewood said.
Matthew Clark can be reached at matthew.clark@morningsun.net or at 620-231-2600, Ext. 140
