Minneapolis player joins casino venture

COLUMBUS, Nov 06, 2009 (The Blade - McClatchy-Tribune Information Services via COMTEX) -- PENN | Quote | Chart | News | PowerRating -- The world champion poker player behind last year's failed proposal for a single casino resort in southwest Ohio quietly came to the table this year as a new plan for four casinos was embraced by voters.

Minneapolis-based Lakes Entertainment Inc., of which Lyle Berman is chief executive officer, struck a deal late in the game with Penn National Gaming Inc. and Cleveland Cavaliers majority owner Dan Gilbert that has given it a 10 percent stake in the Toledo, Cleveland, Columbus, and Cincinnati casino ventures.

Lakes announced Wednesday night that it underwrote 10 percent of the cost of this year's ballot issue in exchange for an equivalent piece of the action. Penn National insisted yesterday that Lakes will not play a role in the operations of its two casinos in Toledo and Columbus.

"Lakes is purely coming in as a passive investor," said Penn National spokesman Eric Schippers. "With all the positive momentum we were experiencing, they approached us literally in the final week to ask if they could invest for a small-equity piece in our facilities in Columbus and Toledo.

"They got 10 percent, but they had no operational say or role in the campaign nor will they have any role or say in the running of these facilities," he said.

The Ohio Jobs and Growth Committee behind Issue 3 had reported spending $32 million to promote the ballot issue through Oct. 14, a number that is expected to climb when campaign reports are filed next month.

"Back in October, we asked for full disclosure of Issue 3 players," said Sen. Teresa Fedor (D., Toledo), one of the leaders of a committee that fought the ballot issue.

"We believe that if you're going to be given the keys to the constitution, we should know who we're giving them to," she said. "Penn National was not forthcoming in disclosing who its investors were. We were told Berman was not an investor. It leads to the question of whether we can trust them."

A Lakes-Penn partnership may appear to be strange given the fact that Penn National spent $37 million in 2008 to persuade voters to reject Issue 6, a proposal for a $600 million casino and resort near Cincinnati that would have competed with Penn's Indiana casino 70 miles away. Lakes had an 80 percent stake in Issue 6.

"Our opposition to Issue 6 last time around was amendment- specific," said Mr. Schippers. "It was nothing personal against Mr. Berman, and it was not personal for Mr. Berman either."

Lakes manages a handful of casinos, among them the tribal Four Winds Resort in southwest Michigan.

"There is still much work to do before these casinos become a reality, but we believe this investment will add value to our company, which will benefit our shareholders for many years to come," President Tim Cope said in a press release announcing the deal.

Mr. Schippers said Penn National's ventures will also have smaller investors in the areas where the casinos are located. Discussions are still under way with potential Toledo investors, he said.

Contact Jim Provance at:

jprovance@theblade.com

or 614-221-0496.

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