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Posted At : November 14, 2008 03:41 PM | Posted By : D McKee
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Gary Goett,Penn National,MGM Mirage,Harrah's,Kansas,Sheldon Adelson
Kansas casino applicants have been dropping like flies and now the buzzards are starting to circle Harrah's Entertainment's $535 million Sumner County project. (Harrah's has already been warned once by the Kansas Lottery that it had better make good on its proposal, in full.) All Harrah's would tell AP is that it doesn't comment on rumors, which is less than a ringing reiteration of its commitment to the Sunflower State.
The folks in Topeka, though, weren't sounding any too confident, uttering things like, "I consider it a possibility, but I haven't heard anything definite." Or "We haven't gotten official notification of anything yet. I know there have been some conversations." Or perhaps the oh-so-reassuring, "When I've checked on the rumors, they have assured us that is not the case, at least not at this time ... but you never know about the future."
There are a couple of observations to be made here. One, which almost goes without saying, is that had Harrah's CEO Gary Loveman not gone a-courtin' to Texas Pacific Group and Apollo Management, we'd probably be talking this moment about a profitable company, not one that lost $130 million over the summer. It has until Jan. 21 to decide which it needs more: The Kansas market or its $25 million soon-to-be-nonrefundable deposit. If it opts to take the money and split, Harrah's will be doubly the loser, having opted out early from a tribal casino-management contract in Kansas in order to take a run at one of the Lottery's concessions instead.
The other thought is that Kansas' four-casino initiative is unraveling in dismaying fashion. Whatever stomach Las Vegas had for managing state-owned casinos in the heartland has been all but lost, especially given the high cost of entry. MGM Mirage, Las Vegas Sands, Pinnacle Entertainment and Olympia Gaming all bailed out late in the audition process.
As for Penn National, not only did it walk away from its Cherokee County concession, no one has stepped forward to replace it. What if they offered a casino license and nobody came? We're about to find out.
(Considering that Penn wanted a parlay of Sumner and Cherokee counties, if Harrah's falters then the Lottery could do worse than swallow its pride and have Penn CEO Peter Carlino on speed-dial.)
That leaves two concessionaires -- Butler National Service Corp. and Cordish Co. -- neither of whom is prominently associated with the casino industry. (In Butler's case, that translates as "completely inexperienced.") It's an inauspcious scenario and, faced with such a mess, Gov. Kathleen Sebelius may find the siren song of Washington, D.C., more appealing with each passing moment.
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