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Board members, who were slated to make their pick on Friday decided they should do a little more research to determine which company -- Butler National Corp. of Olathe or Dodge City Resort and Gaming Co. of Wichita -- could best secure financing for the project.
Part of the reason for the delay, the board said, is the current state of the country's financial markets and growing concern about credit and lending, as risky investment decisions send storied banking institutions into bankruptcy and buyouts.
Taking time to review the companies' financing is a prudent move, especially considering the current state of the economy. But taking the time to review that information should have been a necessary duty of the board, despite the health and security of the country's major lenders.
Residents of Kansas, and in particular the citizens of Dodge City, don't need the Kansas Lottery gambling on the company that will build the state's new casinos. Now that the Legislature has decided gambling will be a part of the state's future, regulators have an obligation to make sure we're not betting on a loser.
According to consultants advising the lottery board, the Dodge City casino likely will bring more than 700,000 visitors annually to western Kansas and should raise approximately $50 million in revenue.
But if these companies can't adjust to the changing economic times or secure the financing needed to construct the buildings in a volatile construction environment, Kansans could be left with a shoddy casino complex that is poorly managed.
That's a risk Kansans simply aren't willing to take, and the board should be applauded for taking a little extra time to ensure that the winner of the 15-year contract can carry its obligation to manage a first-class attraction well into the future.
Board member Bob Boaldin hit it spot on when he declared that the board "can't afford to make a mistake at this point."
With a shaky economy, investments in casinos tend to wane and the lottery board has to make sure it doesn't sign off on a half-funded project. After all, the state's budget for the next several years largely includes new windfall revenue from the state-sponsored casinos.
Butler National claims that it can finance the proposed $87.5 million project, and that a group of investors is waiting in the wings with $20 million to pour into the building.
Dodge City Resort and Gaming touts a $200 million net worth and says it could fund its plan for a $60 million complex.
But as we're now witnessing, boasts made by a number of major corporations have fallen flat. Merrill Lynch, Lehman Brothers and AIG all promised security in the world of finance.
Turns out they had over-leveraged themselves, and many U.S. borrowers and consumers will be on the losing end of the Wall Street fallout.
Another week won't delay the Dodge City casino, and if the postponement gives the lottery board more time to adequately flesh out the financial stability of competing companies, it will be worth the wait.
To see more of The Hutchinson News or to subscribe to the newspaper, go to http://www.hutchnews.com. Copyright (c) 2008, The Hutchinson News, Kan. Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.
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