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Howard Stutz

LV Sands scraps Kansas plan

24 July 2008

LAS VEGAS, Nevada -- Las Vegas Sands Corp. on Wednesday scuttled plans for a $500 million casino complex near Kansas City, Kan., blaming the worsening credit markets and the potential that neighboring Missouri might soften its in-state gambling restrictions.

The company was competing for a single gaming license in Wyandotte County, Kan., and the move seemingly increased the prospects for Las Vegas-based Golden Gaming, which is seeking approval from the Kansas Lottery Commission to build a $662 million casino complex at a location in the Wyandotte County town of Edwardsville.

Three other casino proposals are being offered near Wyandotte's Kansas Speedway area. They include a $650 million proposal from Las Vegas-based Pinnacle Entertainment; a partnership that includes a Kansas-based developer, the Mohegan Indian Tribe and Las Vegas-based Olympia Gaming; and an offer from the Kansas Speedway and Baltimore-based Cordish Co.

Kansas plans to allow one casino each in the cities of Wichita, Kansas City, Dodge City and a site in Wyandotte County by 2012. The state, which will own the casinos, will also allow slot machines only at several racetrack locations.

Golden Gaming Chief Executive Officer Blake Sartini said Wednesday the company always expected stiff competition for the Wyandotte County gaming license when he began exploring the Kansas market. However, he believes Golden Gaming's 240-acre site near Interstate 70 stands out above the others.

"I believe this site gives us tremendous visibility and it is in close proximity and has easy access from Interstate 70," Sartini said.

Golden Gaming's site includes a $252 million second phase and has plans for an 18-hole championship golf course designed by legendary professional golfer and Kansas native Tom Watson.

Golden Gaming's plans call for a 132,000-square-foot casino, 300 hotel rooms, 25,000 square feet of meeting space in the first phase and 129,000 square feet of retail and dining space in the first phase.

Golden Gaming's proposal projected first-year gaming revenues of $289 million.

The proposed casinos in Wyandotte County and Kansas City could face competition across the Missouri River where Missouri may end the current loss limits and allow for higher wagers by casino patrons.

Sartini said Golden Gaming submitted its projections based on Missouri making casino gambling more open-ended.

"We figured the limits would come off but we know what the competitive environment is in Kansas City, (Mo.), and we will have a superior product," Sartini said.

Golden Gaming will present its proposal in a public hearing on Aug. 14 and the Kansas Lottery Commission is expected to make its final decision on Wyandotte County Sept. 19.

Las Vegas Sands President Bill Weidner said the impact of the Missouri changes played a role in the company's decision to pull out of the Kansas bidding process. He said borrowing costs in the current financial market significantly decreased the company's expected return on investment.

"As we pursue our development plans and evaluate potential opportunities around the globe, we constantly review those plans to determine which ones are the most beneficial for the company, its shareholders, and our employees, as well as the communities in which we intend to operate," Weidner said in a statement.

Las Vegas Sands will concentrate on its $12 billion of development along the Cotai Strip region of Macau, a $4 billion project in Singapore, a $550 million condominium tower between The Venetian and Palazzo, and completing a $637 million casino and entertainment development in Bethlehem, Pa.