Butler National seeking $25M cash partner for casino venture

Butler National Service Corp. is seeking additional cash for its proposed casino in Dodge City — and it needs the money before next month.
    The Olathe-based company needs an equity partner to help meet a state requirement that the casino developer must have sufficient financial resources to underwrite the project, the Kansas City Star reported on Monday.
    Butler President and CEO Clark Stewart discussed the situation with industry analysts and investors during a conference call on Monday. A Daily Globe reporter monitored the call, which was linked to the company's Web site, butlernational.com, on Wednesday.
    Stewart said during the conference call that the company already has a loan commitment for $20 million, which hinges on Butler’s selection as the casino developer.
    But he said the state would like Butler to have an additional $20 million to $30 million on hand now, plus an additional $60 million — in the form of a certificate of deposit or a bond that would mature in a couple of years — to finance the second phase of the project.
    "We're looking for somebody with $25 million in cash," he said. "It's real cash, it's got to be cash."
    Stewart said the company is negotiating with possible partners for additional loan commitments, but he declined to identify them. He also declined to provide additional details on how or when the company might secure the necessary cash.
    Butler is competing for the right to develop and manage a state-owned resort-style casino in Dodge City.
    The company has proposed building a $22.3 million temporary casino, followed by a $70.6 million permanent resort-style complex with restaurants, a spa and an entertainment/conference center. Both facilities would be located on the western outskirts of town next to U.S. Highway 50.
    The Star reported that a state consultant reviewed Butler's balance sheets earlier this year and found $1.3 million in cash on hand. Sales and income for the year ending April 30 totaled $17.6 million, with a net income of $1.2 million, the newspaper said.
    Butler's competition for the Dodge City casino comes from the Wichita-based company Dodge City Resort and Gaming Co., which has proposed building a $20 million temporary casino near the northeast edge of town. Within two years after the temporary casino opens, the company would open a $60.3 million permanent casino and hotel with room for expansion.
    Dodge City Resort and Gaming would turn daily operations of its casino over to the Minnesota-based company Ingenus Management and Consulting.

A looming deadline
    The Kansas Lottery Gaming Facility Review Board is expected to select the developer of the Dodge City casino on Sept. 19, which gives Butler a little more than a month to find an equity partner, Stewart told shareholders on Monday.
    "It's not like we can raise the money six months from now," he said. "We've got to have the money now."
    He added that the company must retain at least 60 percent of the interest in the project, leaving its equity partner with no more than 40 percent.
    Butler has a letter of intent from the Las Vegas-based Navegante Group, which operates casinos in Nevada, to run the Dodge City casino for the first three years. But Stewart said the Navegante Group is not an equity partner in the project at this point.
    Stewart said he did not think the Lottery Gaming Facility Review Board would require Butler to have the additional cash on hand, which he characterized as "feel-good money for the state."
    "They haven't said we have to have it," he said. "You can tell by their comments they'd really like to have us have that money, and I think that's what we've got to do."