Kansas Supreme Court rules unanimously in favor of Kansas Crossing

TOPEKA — The Kansas Supreme Court Friday unanimously upheld four previous district court rulings essentially ending the lawsuit filed against Kansas Crossing.

Kansas Crossing Lead Developer Bruce Christenson said in a release he was pleased with the outcome.

“We’re excited to have this issue resolved,” said Bruce Christenson, lead investor of the Kansas Crossing Casino. “Our entire team is looking forward to doing great things for southeast Kansas.”

Kansas Crossing — the smallest of three competing proposals — was awarded the bid to build the final of four state-owned casinos in July of 2015.

Losing bidders Castle Rock, and the Cherokee County Commission — where the Castle Rock property would have been built — promptly sued, claiming the Kansas Racing and Gaming Commission acted improperly in awarding the bid to the smaller development.

Kansas Crossing was scheduled to be completed in June of 2016 but the lawsuit three times delayed commencement of construction.

Castle Rock's bid was for a $145 million project for U.S. 400 near Interstate 44 in Cherokee County, and was the largest proposal.

Castle Rock's proposal was not only more than twice the size of Kansas Crossing's but was expected to bring in nearly 1 million visitors per year — mostly from out of state — about double the expectations from Kansas Crossing.

However an independent review questioned Castle Rock's ability to meet its debt service and to remain viable long-term.

In an April, 2016 decision — the fourth such defeat for Castle Rock — Judge Larry D. Hendricks deferred to the gaming commission’s judgement noting that “to subvert that judgement in favor of a straight mathematical test of ‘best’ based solely on projected estimates would transform the entire … process into a mere numbers game, one in which the house — in this case, the State of Kansas — is far from certain to win.”

Hendricks also noted that Cherokee County argued that the state acted “arbitrarily, capriciously and otherwise unreasonably when they selected Kansas Crossing over Castle Rock.”

Hendricks rejected this, saying that while it was clear Castle Rock could obtain funding in any one of a number of ways, but that “the board’s concern with Castle Rock does not seem to have been that it could not be funded, however, but that it would fail even if it was funded.”

In the end, Hendricks said it didn't matter if he agreed with the board’s decision or not, but rather whether the board acted in an arbitrary, capricious or otherwise unreasonable manner, which he said was not the case “in light of the market uncertainties and the evidence before it.”

Justice Caleb Stegall, writing for the court, agreed in full with Hendricks.

"In light of the record as a whole, the Board could reasonably conclude that Castle Rock — though bigger — posed an unacceptable risk," Stegall wrote. "Certainly, a reasonable person could conclude that a smaller but more sustainable casino could better serve the interests of Kansans."

The Kansas Crossing Casino and Hotel, located near the junction of U.S. Highways 69 and 400 in Crawford County, is an $80 million development that features over 625 slot machines, 16 gaming tables, a 123-room Hampton Inn and Suites and entertainment complex. The project has created 400 jobs.