Archive for Thursday, December 18, 2008

Casino revenues no longer a sure bet

State, municipal units should be cautious about gambling funds

December 18, 2008

State and local officials are wise to continue their push to find an operator for a destination casino in Wyandotte County, but they’d also be wise to dial down any plans for spending revenues generated by state-run gambling houses.

The large Las Vegas-based style operations are finding that casinos aren’t as recession-proof as they once were thought. Their bottom lines combined with the poor economy are causing second thoughts about the business, as evidenced in the recent pull out from Kansas by the group that proposed a Hard Rock Hotel and Casino at Kansas Speedway. A month ago, the group licensed to build a state-run Harrah’s in Sumner County also withdrew, and in September the group that won state backing for a casino in southeast Kansas said it no longer would move forward with the plans.

The Hard Rock group — a joint venture by The Cordish Company and Kansas Speedway — has indicated it would re-apply to the state with a plan that allows phased construction of a destination casino in Wyandotte County. Other groups are likely to be interested in Wyandotte County, too. That’s the encouraging news.

But the trepidation already shown by the casino groups should strike a cautious chord with anyone hoping to cash in on expanded gaming in Kansas — at least for the time being.

In 2007, when the push was on in the Legislature for expanding casino gambling, supporters said the state could realize upwards of $200 million per year in revenues from casinos and slot machines at the state’s race tracks. That’s not going to happen now.

A November estimate by Kansas economic forecasters put the figure at $23 million for the next budget year. But the estimate was made before the Hard Rock bid was withdrawn.

Locally, Wyandotte County’s Unified Government and the cities of Bonner Springs and Edwardsville were to split 3 percent of the Hard Rock’s gambling revenues under an agreed-upon formula.

Bonner Springs Mayor Clausie Smith and the Bonner Springs City Council seem to have the right mindset. They won’t plan on spending any casino money until it’s in their hands.

“When we see the money coming, then we’ll put it in the budget,” Smith said. “It’s not prudent business to put it in til we actually see it.”

It’s the kind of “sure-thing” gamble we’d like to see taken by all of the Kansas governmental entities seeking casino-generated revenues.

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