An Olathe company that is relying heavily on Wall Street investment bank Merrill Lynch for its financing won a contract Friday to build and manage a state-owned casino in Dodge City.

The Lottery Gaming Facility Review Board chose Butler National Service Corp. over Dodge City Resort and Gaming, a group of Kansas investors.

Butler National plans to build an $88 million complex that includes a 124-room hotel, operating as Boot Hill Casino and Resort. The company plans to open a casino with 575 slot machines and 10 gambling tables by September 2009 and the entire complex in 2011.


An Olathe company that is relying heavily on Wall Street investment bank Merrill Lynch for its financing won a contract Friday to build and manage a state-owned casino in Dodge City.

The Lottery Gaming Facility Review Board chose Butler National Service Corp. over Dodge City Resort and Gaming, a group of Kansas investors.

Butler National plans to build an $88 million complex that includes a 124-room hotel, operating as Boot Hill Casino and Resort. The company plans to open a casino with 575 slot machines and 10 gambling tables by September 2009 and the entire complex in 2011.

Final approval of the contract rests with the Kansas Racing and Gaming Commission, which will regulate the casino, after it conducts a background check.

Review board members had postponed the decision for a week because they questioned whether either applicant could secure adequate financing with the nation’s markets in turmoil. They sought more information about each and evidence of firm commitments from potential lenders.

Butler National supplied a letter, dated Wednesday, from a Merrill Lynch director, saying the lender was “highly confident” of being able to arrange $45 million for the casino project. Five Kansas banks have committed to providing an additional $20 million, with investors providing the remaining capital.

“I am satisfied that Butler National can, in fact, finance the project,” said board member Jack Brier, a former Kansas secretary of state, now a prominent Topeka real estate developer.

Merrill Lynch, the nation’s largest brokerage, found itself squeezed by the ongoing credit crunch and, to avoid being pushed into bankruptcy, agreed recently to a buyout by Bank of America Corp.

But its letter to Butler National persuaded five of seven board members to approve the proposal.

The state-owned casino in Ford County is one of four authorized by a law enacted last year. Butler National’s contract is with the Kansas Lottery, which will own the new gambling. The state will receive at least 22 percent of the revenues.

The review board’s consultants’ average projections for revenues from Butler National’s casino was nearly $50 million for its third year of operation. The state would receive almost $11 million a year in revenues.

The two dissenting board members, Chairman Matt All, of Topeka, and Jim Bergfalk, of Mission, questioned whether Butler’s project would be overbuilt. Dodge City Resorts’ plan was for a $70 million complex. Both plans called for a casino in Dodge City, the county’s largest town with about 27,700 people.

“I prefer a more conservative approach in Dodge City, particularly in today’s gaming market and today’s capital market,” All said.

The law enacted last year also allowed one casino each in Wyandotte County, Sumner County and either Cherokee or Crawford County.

For Wyandotte County, considered the most lucrative market, the board picked a partnership between Kansas Speedway and The Cordish Co., of Baltimore. For Sumner County, it picked a group led by Harrah’s Entertainment Inc.

It picked Penn National Gaming Inc. for Cherokee County, but Penn walked away from the deal, saying it couldn’t compete with a nearby Oklahoma tribal casino.

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On the Net:

Racing and Gaming Commission: http://www.ksracing.org/

Kansas Lottery: http://www.kslottery.com/