Cherokee County officials discuss options if Penn National pulls out of casino deal

Columbus, Kansas – The Cherokee County commissioners on Monday met behind closed doors with their attorney for casino issues to discuss possible action if Penn National Gaming withdraws from its contract for a state-owned casino in the county.

The Kansas Lottery Gaming Facility Review Board on Aug. 22 approved Penn National’s contract for the Cherokee County casino, but the board also went with a proposal by Harrah’s Entertainment for a casino in Sumner County.

Penn National officials have said they might pull out of Cherokee County if the company didn’t also get the contract in Sumner County. Eric Schippers, public affairs vice president for Penn National, said at the review board meeting that the company’s board of directors would make the decision. Schippers on Monday said a decision likely would be announced today or Wednesday.

Schippers and other Penn National officials have said competition from the USD 301 million Downstream Casino Resort, built just south of Penn National’s proposed casino site, makes their project a bad business decision.

Penn National proposed starting with a USD 125 million investment and phasing in an additional USD 100 million worth of improvements.

Penn National paid the state a USD 25 million “privilege fee” but could get the money back if it withdraws before the Kansas Racing and Gaming Commission gives final approval of the contract. A decision on that is expected by Oct. 31.

The county commissioners met behind closed doors for 30 minutes with attorney David Cooper to discuss privileged attorney-client information. He wouldn’t specify what options were discussed, though in the past he has said legal action against Penn National is possible if the company withdraws. The county’s expenses for Cooper have been reimbursed by Penn National.

Cooper said he would be disappointed if Penn withdraws.

“If they pull out, it would be 14 months of work down the drain, and 14 months delay in getting a revenue stream for the county,” he said.

Cooper said that if Penn pulls out, the procedure would start from the beginning. Commissioner Rodney Edmondson said he was concerned that no new applicants might come forward.

“It’s a concern and a possibility,” Edmondson said.

Cooper said he initially sent requests to at least 13 casino companies and tribes, but Penn National was the only applicant.

“Our fate is not in our hands,” Cooper said.