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Layoffs announced by Kan. gambling regulators

Jan 8, 2009 2:49 AM
Staff & Wire Reports |

The Kansas Racing and Gaming Commission is cutting staff because plans for expanded gambling in the state didn't develop as expected as the economy faltered.

The commission said Tuesday it will lay off 11 employees and reduce hours for another 10 workers, effective Feb. 7. The reductions come while all state agencies are looking for ways to cut spending in response to sagging state revenues.

Those being laid off or having hours reduced include enforcement agents, financial investigators, auditors and information technology and administrative staff, most of whom were hired last year in anticipation of increased gambling.

"The KRGC made appropriate staffing decisions based on representations that gaming facilities would already be operating in Kansas by now," said executive director Stephen Martino. "Those plans didn't materialize so we have to react accordingly."

The changes will result in a 48 percent reduction in the $3 million annual payroll, saving $55,564 for each two-week pay period.

Along with the layoffs, six workers will have a 50 percent reduction in hours; two will hours cut 25 percent and two others will have a 20 percent reduction. Additionally, seven vacant positions won't be filled. The agency now has 37 employees but will have 14 full-time and 10 part-time employees after Feb. 7.

The agency's decision comes as the state faces one of its' worst budget crisis.

Economists project the state will end the current budget year on June 30 with a $141 billion deficit unless cuts are made by legislators after their session convenes Monday.

Left unchecked, the shortfall between anticipated revenues and current spending commitments will be around $1 billion by the end of the next budget year on June 30, 2010.

A 2007 law created four state-owned casinos, one each in Ford, Sumner and Wyandotte counties and either Crawford or Cherokee counties. Three applicants seeking a 15-year operating contract withdrew their application, leaving only the Ford County facility in Dodge City, the smallest of the four.

The law also allowed slot machines at race tracks in Crawford, Sedgwick and Wyandotte counties. Sedgwick County voters in 2007 rejected casinos and slots at the Wichita Greyhound Park and it closed.

The Woodlands horse and dog track in Kansas City, Kan., and Camptown Greyhound Park in Frontenac couldn't reach agreement with the Kansas Lottery, which owns the gambling, over how much slot revenue they should get. The Woodlands closed in August and Camptown had been closed since 2000.

At the track owners' request, the Racing and Gaming Commission last month postponed revoking their operating licenses to give them time to persuade lawmakers to change the statute to give them a bigger percentage. But legislative leaders say that isn't likely to happen.

"With only the Dodge City casino projected to open this year, there is not enough ongoing work to justify our current staffing levels," Martino said.

Work began last month on the western-themed complex in Dodge City operated by Butler National Service Corp., of Olathe. It plans to have the casino and dining area open by early December and complete the $88 million complex at the end of 2011 with 875 slots, 20 game tables and a 124-room hotel and convention center.

Racing and Gaming spokesman Mike Deines said the agency is overseeing the construction phase, including background checks for all contractors and workers at the site.

It also will license all vendors doing business with the casino. When the casino opens, the agency will have its regulators there around the clock.

Penn National Gaming Inc., of Wyomissing, Pa., walked away from its Cherokee County contract in September, citing competition from a nearby Oklahoma tribal casino.

A group led by Las-Vegas based Harrah's Entertainment Inc., planned to build the Sumner County casino, but Harrah's pulled out in November, citing turmoil in the financial markets.

Last month, a partnership of Kansas Speedway and Baltimore-based Cordish Co., withdrew its application for a casino at the speedway in Wyandotte County, saying it wanted to revise plans because of market conditions and resubmit them.

The Lottery is rebidding the three areas but hasn't received any applications. The deadlines for applying are Jan. 21 for Cherokee County and April 1 for Sumner and Wyandotte counties.