Business in racing: Casino raises NASCAR stakes at Kansas Speedway
Trading paint, say hello to ante up. Those maxims will soon race side by side at Kansas Speedway, where a $705 million casino is scheduled to open in three years next to the NASCAR track.
A state gambling board in Kansas recently approved the trackside casino proposal, setting the stage for a massive tourism push.
Yes, Toto, you’re still in Kansas, and that really is a bank of slot machines headed to the track.
Track owner International Speedway Corp. teamed with developer The Cordish Co. to make the Hard Rock Hotel & Casino reality in Kansas, adding a jolt of Vegas Oz to the Midwest.
Analysts of publicly held ISC like the idea. Tim Conder, who follows the company for Wachovia Capital Markets, praised the project for bringing another moneymaker to the table while keeping the primary focus on the company’s main racing business.
As for marrying a sports company with a casino, principals see no need for caution flags.
“We really didn’t see a down side,” says Jeff Boerger, Kansas Speedway president. “At the end of the day, when gaming legislation passed the state of Kansas, we decided as a company this is something that would be good for our shareholders. This is an added-value for our race fans.”
For years, NASCAR has staged races in Las Vegas, where betting on sports is legal, without incident and with consistently strong crowds. Some observers have long harrumphed at sports leagues’ hyper-sensitivity toward gambling even as odds and point spreads fill newspaper sports sections.
Though all of the major sports leagues still refuse to award a franchise to Las Vegas, the barriers between gambling and sports have ebbed in recent years. Las Vegas hosted the 2007 NBA All-Star game and a Connecticut casino owns a WNBA franchise.
NASCAR’s gambling rules for drivers and others in the sport are more lenient than those imposed by other major sports leagues. Other sports may be more leery of gambling because of past episodes, including baseball (the Black Sox, Pete Rose) and football (Paul Hornung, Alex Karras). Companies in the gambling and casino business have been allowed as sponsors in a range of sports, including NASCAR.
NASCAR spokesman Ramsey Poston says drivers are prohibited from betting on races they participate in, but he acknowledges the sport has a much closer relationship with various forms of gambling, from casinos to NASCAR-licensed lottery scratch cards.
"Other sports leagues have wrestled with this question," Poston says. "This
is an aspect where we're different."
Lesa France Kennedy serves as president of Kansas Speedway parent ISC and sits on NASCAR’s board of directors. Thus, the Kansas project represents one of major professional sports’ closest links with a casino.
To win the casino project, ISC placed a bet on the power of a second Sprint Cup date. It paid off handsomely, as the prospect of a second race helped propel a successful casino bid. Expect a second race at the track in time for the Hard Rock’s 2011 opening.
Speedway plans call for an infield road course and the likely addition of lights to make one or both of the races night-time events.
Boerger believes the 80,000-seat track has the right capacity. An outside consultant estimates that the casino will bring an additional 8 million people to the area each year, Boerger says. Those additional bodies offer tantalizing opportunities to sell NASCAR tickets.
How close will the casino and track be? Boerger says casino guests who hop in the pool on a race weekend will be able to glance down at Turn 2 and see stock cars whipping around the track. Now that’s close.
