TOPEKA — Attorneys for a group of investors who lost a bid to build a casino in southeast Kansas have filed a lawsuit seeking to overturn the state’s choice of a competitor’s proposal.
Castle Rock Casino filed a lawsuit July 31 in Shawnee County against the Kansas Racing and Gaming Commission, the Kansas Gaming Facility Review Board and members of both groups. The Kansas Lottery and its executive director also are named in the lawsuit.
The review board in June chose a $70 million project called the Kansas Crossing Hotel & Casino to be built south of Pittsburg. The choice was approved in early July by the gaming commission, which regulates state-owned casinos. Castle Rock had proposed building a much larger $145 million casino complex in Cherokee County.
Castle Rock officials argue in the lawsuit that the review board made the wrong decision and did not follow state law, which requires it to determine which contract offered maximum revenue, encourages tourism and serves the best interests of Kansas.
“We don’t think the facility review board and the gaming commission did what they were supposed to do and pick the best contract,” Russell Jones, an attorney for Castle Rock, told The Pittsburg Morning Sun. “We feel strongly that Castle Rock had the best proposal.”
Castle Rock’s proposal
Castle Rock developers said their proposal would offer 1,400 slot machines, 35 table games and a 16-table poker room and attract more than a million visitors a year. In comparison, Kansas Crossing developers estimated their casino’s 625 slot machines and 16 poker tables would draw about 500,000 visitors annually.
Fred Waller, an enforcement agent and spokesman for the Kansas Racing and Gaming Commission, said the review board had used proper procedures.
“We used the same procedure as we used in the first (casino) selection,” Waller said. “It’s a different board but the same process. So we’re satisfied.”
Waller said if the judge rules in Castle Rock’s favor, the selection process would start over.
Review board members said the smaller casino complex would be the right size for the market and noted its main investors already had strong ties to two other state-owned casinos. And consultants hired by the review board expressed concern over Castle Rock’s revenue projections, and whether it would be profitable enough to cover payments on $95 million in potential debt helping finance the project.
Castle Rock wants to have its lawsuit combined with another lawsuit filed by the Cherokee County Board of Commissioners, which seeks to prevent construction of the Kansas Crossing casino, Jones said. On July 31, District Judge Larry Hendricks rejected Cherokee County’s request for a temporary injunction.
Pittsburg City Manager Daron Hall said it was unfortunate the lawsuits have been filed.
“The difficult thing about everybody suing everybody else it is limits the opportunity to talk,” he said. “What we need is to sit down and talk with Cherokee County (about what’s good for the area.)”
Jones said it is unlikely the lawsuit would go to trial until next year.
The southeast Kansas casino is the last of four nontribal casinos allowed under a 2007 Kansas law, joining casinos in Dodge City, south of Wichita and in Kansas City, Kansas. The Kansas Lottery owns the casinos and the state receives at least 22 percent of the gambling profits.
