Business executives in charge of the Hollywood Casino in Kansas City, Kansas, presented a new plan Monday to build a hotel — more than a decade after the deadline — and finally deliver the long-awaited promise of a resort experience near the Kansas Speedway track to make it come true.
After Hollywood Casino welcomed its first gamblers in 2012, the owners had two years to start work on the additional hotel. But that never happened. In 2015, owners cited proposed changes to casino taxes and gambling laws as a reason for shelving a $200 million, 250-room concept.
Hollywood Casino has been content enough to pay millions of dollars in damages over the past decade rather than build the hotel, a requirement under the development agreement with the United Government. But the game has apparently changed now.
The questions about the hotel come as Penn National Gaming Inc. asks for a 15-year contract extension from the Kansas Lottery to continue running Hollywood Casino. The owners want a letter of support from the United Government before that evaluation progresses.
Aaron Rosenthal, Penn’s senior vice president of regional operations, said Monday “we think this is finally the right time” to bring a hotel into the operation.
“It’s something we’ve been thinking about since before the casino opened and something we’ve gone back to every year to determine its feasibility,” Rosenthal told the United Government’s Economic Development and Finance Commission during a hearing on a proposed amendment to the development agreement. .
“And for several reasons, the feasibility didn’t make sense to us. But now it is happening.”
Why the long wait?
Developers said previous market studies showed little room for a new hotel in the area and feared building a hotel next to the casino would hurt other hospitality businesses.
On Monday, representatives from Penn Gaming and the Kansas Speedway, which jointly own KCK’s Hollywood Casino through the business entity Kansas Entertainment LLC, presented to the committee. They threw a hotel with at least 125 rooms. Construction would start at the end of 2026.
The proposed hotel would be half the size of the one initially promised, although the owners say there is room for expansion if the market supports it over time. Developers pointed to declining vacancies at neighboring hotels as an indicator of strong demand, even as more hotel rooms are built, including a Margaritaville resort that is part of the sprawling Homefield development in western Wyandotte County.
Other benefits of building the hotel, according to the owners, are the temporary construction and permanent jobs at the hotel that will follow. A project plan is still incomplete and the owners are working with a yet-to-be-named external hotel partner to move the ball forward.
At the same time that Penn Gaming is seeking support from the United Government to strengthen its case to renew its contract, Hollywood Casino is proposing an increase in its local charitable contributions from $500,000 to $850,000 per year.
During the first hearing on the issue Monday evening, some committee members questioned a draft provision of the agreement that would halt annual penalty payments to the United Government for two years.
Every year since the promised hotel’s clock started running, the United Government treasury has received a hefty fine – a 1% share of annual casino revenues, calculated through Hollywood Casino’s state gaming contract – to foot the bill for unrealized tax growth. cover.
In 2024, Hollywood Casino’s revenues were $162 million, according to figures from the Kansas Racing and Gaming Commission. According to budget documents, the United Government received $1.1 million from the fine last year.
In 2023, the Kansas City Business Journal reported that Kansas Entertainment had paid $12 million in fines to the United Government since 2015.
7th District Commissioner Chuck Stites expressed discomfort with the idea of giving Hollywood Casino a fine waiver for the next two years before the hotel is built.
“Right now they’re paying it because they haven’t built a hotel,” Stites said, adding that he eventually wants to see a hotel built instead of an annual fine. “And if they still haven’t built a hotel, why would we shoot ourselves in the foot by releasing them?”
At-Large Commissioner Tom Burroughs, 2nd District, recommended keeping the penalty phases intact going forward. He noted that the United Government’s tight spending plan for 2025 already depends on that money.
Jeff Morris, Penn’s vice president of public affairs, said Hollywood Casino may agree to continue paying the fine until material progress is made with the hotel.
The commission advanced the proposed agreement on a 4-2 vote, with instructions to its attorneys to draft language on the penalties and to facilitate broader discussion by all commissioners on the proposal. It is scheduled to be submitted to the Unified Government Board of Commissioners for consideration in late October.
