Opinion ID: 618830
Heading Depth: 1
Heading Rank: 14

Heading: Downstream's opening and impact on KPG

Text: On July 5, 2008, the Quapaw opened its $300 million Downstream Casino (Downstream) for business. Downstream operated under a lower tax rate than the 27 percent rate that would have applied to any casino operated in the southeast gaming zone. After Downstream opened, KPG's analysts concluded that, even with a phased capital investment, a casino on the Subject Property would not, under the terms of the executed-but-not-yet-binding Management Contract, generate a sufficient return on investment to meet KPG's internal investment thresholds. Penn National and KPG did, however, believe that a casino on the Subject Property, combined with a casino in the south central gaming zone, presented a viable overall investment for the company. Consequently, Penn National and KPG made efforts to promote this southern strategy, i.e., the operation of two commonly owned and similarly themed casinos in southern Kansas, with the Review Board. [1]