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Hollywood Casino delays start of hotel project

By Staff Report - | Apr 13, 2015

The owners of the Hollywood Casino at Kansas Speedway are postponing construction of a 248-room hotel, which was to be underway this week, due to legislation currently under discussion.

Executives with Kansas Entertainment and Penn National Gaming, owners of the Hollywood Casino, indicate proposals in the Kansas Legislature to change the way casinos are taxed and a bill to designed to help the Woodlands Race Track reopen with as many as 2,800 slot machines played a role in their decision to delay construction of the hotel. That legislation would give the Woodlands a significant tax advantage over the Hollywood Casino.

“This decision was a difficult one but one that is based on continued soft economic conditions in the region, especially in the hotel market, and other proposed changes to the casino operating environment currently pending in the Kansas Legislature including the ongoing attempts to change gaming tax laws in favor of the Woodlands and change property tax laws for Kansas’ casino operators,” BJ Fair, Chief Development Officer for Penn National Gaming, said in a media release.

Under the development agreement between the casino and the Unified Government of Wyandotte County and Kansas City, Kan., the casino must now pay a financial penalty for not building the hotel. The penalty is 1 percent of the casino’s annual gaming revenues. The terms of the deal call for the casino to start paying the penalty dating back to February 2014.

“Hollywood Casino is a strong partner, which provides major financial support to our community,” Unified Government Mayor Mark Holland said in a news release. “While I’m disappointed the hotel project is not moving forward at this time, I’m pleased the Unified Government will receive significant new revenues from the casino operator for as long as the project is postponed. That is a benefit and positive news for our citizens and taxpayers.”

Hollywood Casino revenues from February 2014-February 2015 total more than $148 million, which means the 1 percent penalty which must be paid to the Unified Government will come to more than $1.4 million. The penalty on annual gaming revenues must be paid every year until construction of the hotel actually begins.

Holland says the delay in the casino hotel project is not a negative reflection on the Village West area.

“The Village West area continues to be a major draw for tourists, business investment and is an economic leader in the Kansas City region,” he said. “The Legends Outlets is adding a number of new restaurants, shops and a new Residence Inn Hotel. The new $64 million United States Soccer Training Complex, a multi-dealership auto plaza and the global headquarters for the Dairy Farmers of America will also call the area home. And Hollywood Casino continues to do well in the very competitive Kansas City gaming market. The future remains bright for Wyandotte County.”

Penn National Gaming executives say they will continue to evaluate the viability of the hotel development and hope to move forward with the hotel project in the near future.