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Howard Stutz

LV Sands, Pinnacle seeking Kansas gaming license

25 September 2007

LAS VEGAS, Nevada -- Las Vegas Sands Corp. and Las Vegas-based Pinnacle Entertainment on Monday became the first major casino operators to announce they would seek a gaming license in Kansas.

Both companies are bidding on a single gaming license that would place a casino in Wyandotte County in suburban Kansas City, which is on the Kansas-Missouri border.

Lawmakers enacted legislation this year to bring four Las Vegas-style casinos into the Sunflower State, marking the first tangible domestic casino expansion since Pennsylvania paved way for slot machine-only casinos and racinos a year ago.

Las Vegas Sands, which is opening the $1.8 billion Palazzo on the Strip in December, was the only Nevada operator to win one of the five Pennsylvania licenses. The company is building the $600 million Sands Bethworks in Bethlehem, Pa., at the site of the closed Bethlehem Steel Mill.

Pinnacle Entertainment, which does not operate a casino in Las Vegas, said it would build a Kansas casino in one of two locations off Interstate 435.

The Kansas casinos, which will include slot machines and table games, required a minimum investment of $225 million. The stand-alone casinos are slated for four locations -- Kansas City, Wichita, Dodge City and southeastern Kansas. The tax rate will be 27 percent, with certain parameters for entry.

The legislation was signed into law after Kansas legislators said they were tired of state residents flocking across the border to wager away potential tax dollars at casinos in Kansas City, Mo., or at American Indian-run casinos in Oklahoma.

Las Vegas Sands spokesman Ron Reese said the company decided to enter the Kansas casino competition because it offered the gaming operator the chance to build a large-scale destination resort.

Las Vegas Sands President Bill Weidner said the company, which opened the $2.4 billion Venetian Macau last month in China, has $12 billion of hotel-casino projects in various development phases on Macau's Cotai Strip and is spending $3.6 billion to build the Marina Bay Sands in Singapore, was uniquely qualified to take on the Kansas project.

"We are confident our proposal will stimulate increased tourism and become the type of landmark development that will make the entire Sunflower State proud," Weidner said.

"This represents a unique opportunity to enhance the substantial destination development that already exists in Kansas City, Kansas," Pinnacle CEO Dan Lee said.

It will be at least December before Las Vegas Sands or Pinnacle know if it's the winning bidder.

"We expect that several public gaming operators could apply for a Kansas casino license, as it represents one of few new gaming opportunities domestically," Deutsche Bank gaming analyst Bill Lerner said in a note to investors.

Shares of Las Vegas Sands rose $9.69 in trading on the New York Stock Exchange Monday to close at $139.34, up 7.47 percent. Jefferies & Co. on Monday raised their price target on Las Vegas Sands by $39 a share.