Kansas Entertainment LLC, the operator of the Hollywood Casino at Kansas Speedway, recently notified the Unified Government of Wyandotte County/Kansas City of their decision to postpone the construction of a new hotel located adjacent to the casino property. The operator was supposed to begin construction by February of last year according to the casino development agreement with the UG, but has since decided against building the hotel property based on current market conditions.

Kansas Entertainment LLC now faces as much as $1.25 million in sanctions based on the agreement with the Unified Government of Wyandotte County. In the agreement, the operator would have to pay 1% of the casino’s annual gross gaming revenues to the UG each year that the hotel is not created. Just last year the UG agreed to extend the deadline for hotel construction but that time frame was up in March of this year.

Kansas Entertainment was reportedly set to begin construction this past January but work never began. The Chief Development Officer for Penn National Gaming, one half of the Kansas Entertainment LLC, William Fair, stated in a press release it is the economy that has forced the operator to decide to postpone the hotel.

In the press release, Fair stated the decision was a tough one but based on the soft economic conditions of the area, especially when considering the hotel market, the hotel had to be put on hold. Fair went on to state that Kansas Entertainment will continue to evaluate the viability of a hotel connected to the casino as conditions in the market change.