Groups from Lyon County and Fort Dodge which hope to win a new casino license breezed through reviews of their financial proposals today, while the Racing and Gaming Commission raised several questions about financing proposals for projects in Tama County and Ottumwa. The four groups explained their financing proposals and answered questions from the commission at the meeting in Johnston.
Kehl Management is proposing a casino in northwest Iowa’s Lyon County, and chief executive Dan Kehl says they have had success in selling stock during the recent holiday. Kehl says they are looking to raise $28-million to $42-million on the high end, and in the week before Christmas they collected $14.2 million in subscriptions and since that time they have raised another one million dollars.
Kehl says his family has committed to covering whatever remaining funds are needed. The $120-million project also includes $70-million from Jeffries Funding in New York. Peninsula Gaming plans a $56-million casino in Fort Dodge. Peninsula representative Natalie Shram told the commission they are seeking outside funding, but the company is prepared to cover the cost if needed.
She says Peninsula currently has a $58-million revolving fund available, with 35-million dollars cash on hand and they have the ability to increase the revolving fund to $115-million, and unsecured financing of up to 30 to 50 million. Commissioners said the two had provided everything they asked for in the financial statements.
The other two presentations drew questions. Ingenus Management and Consulting of Brainerd, Minnesota says it has lined up $40-million in funding for the Ottumwa casino in Wappello County through a North Carolina company. Ingenus president Ken Mimmack says they hope to get local investors too.
Mimmack says they have set aside up to 25% for local investment, but says with the time commitment to get the investor information in, they don’t have the local investors yet. Mimmack was asked by a commissioner if Ingenus has investment in the casino and if they would be the owners. Mimmack says they have around one million dollars invested in the project.
Signature Management Group of Sioux City is developing the Tama County casino project. Signature President John Pavone said half of the project would be paid for with financing from Northland Securities of Minneapolis, Minnesota. He says stock ownership will make up the other half. Mimmack says they hope to include 20% local ownership and could have the names of the investors in 60 days. Commissioners told Mimmack they need the names as soon as possible for a background check. He said they didn’t think it would be a problem.
Mimmack says they didn’t think that anyone from the Iowa investors would own more than five percent, except for those who had already been revealed. He said they can go back and get the information and get it back to the commissioners as soon as possible. Anyone who owns %5 or more of a casino has to undergo a background check by the D.C.I.
Racing and Gaming Commission chair, Greg Seyfer of Cedar Rapids said after the meeting that the lack of information on potential investors is a problem for the Tama and Wapello County projects. “It’s important for us to know who’s involved and it’s very important for the D.C.I. to be able to do what they need to do in their background checks to know who the investors are gonna be,” Seyfer says.
The talk of financing for new casinos comes at a time when the 17 current state licensed casinos have seen revenues drop. Seyfer says the economy will figure into a decision on whether any of the four organizations eventually win a license. He says its another factor and goes to the issue of the cannibalization of the existing casinos.
The commission will get the D.C.I. background reports on the four new casinos and visit the proposed casino sites in April. They will hold a public hearing on the issue on May 4th and are scheduled to make a decision on any new licenses on May 13th.