In 2006, Penn National signed an agreement with Charles Ruma, the track owner, giving Penn a 60 day option to purchase the track if legislation, referendum or a state constitutional amendment allowed slot machines at the racing complex.

However in September 2009, Ruma filed a lawsuit against the casino operator alleging breach of contract.

Ruma claimed that Penn violated terms of the agreement by co-sponsoring Issue 3, which resulted in Penn being allowed to build two casinos in Ohio and delaying implementation of slot machines at racetracks.

Representatives from both companies have declined to comment on the rumors.

Eric Schippers, senior vice president of public affairs for Penn National said, “We cannot comment on new business opportunities we may be pursuing.”

Charles Ruma said, “We’ve been trying to work it out, there’s potentially a deal. Everyone knows when you go to court, neither side wins. The lawyers win.”

Ruma added, “It could be, or it could fall apart at any minute. You never know, but its close. If it’s going to happen, it’s going to happen in the next seven days for sure.”

Two local consulting firms will lead the “Vote Yes on Issue 2” campaign, Griffin Communications and Strategic Public Partners Group.

Griffin Communications is lead by the lead organizer behind Stand up Columbus, that was responsible for casino relocation efforts and Strategic Public Partners Group worked for Penn last year on the Issue 3 campaign.

The formal campaign kick-off is expected mid-March however fundraising efforts have already begun.

Local business are expected to contribute the bulk of the $4 million to $5 million organizers hope to raise for the statewide campaign.

Penn has committed financial support but has not determined an exact amount.

The main focus of the campaign will be raising awareness of the benefits of the casino relocation, including the opposition faced in the Arena District and the support of the West Side.

According to Lisa Griffin, the campaign will also highlight the possibility that Penn National’s investment will increase on the west side of Columbus.

Penn National spokesperson Bob Tennenbaum said the company’s investment on the west side could approach $400 million if they decide to build a hotel on the new site at the former Delphi plant. The company planned to spend $250 million at the Arena District site.

The brokerage firm downgraded Penn from “neutral” to “sell” citing that unemployment continues to weigh on consumer spending.

Goldman also told investors in a research note today, that they expect that the casino operator will see slowness in expense reductions and weaker revenues throughout the region.

“While traffic trends at regional casinos have recently been noted to be flat, spend per visit continues to decrease … largely due to elevated unemployment levels and a poor job outlook in some areas.”

Along with the downgrade in rating Goldman also cut its price target on shares of Penn from $25 to $20.

The stock closed Friday at 23.34 on volume of 793,098 shares, below average daily volume of 946,328.

Penn National Gaming is currently below its 50-day moving average of $27.47 and below its 200-day moving average of $28.97.

The partnership was endorsed in 2009 by the Unified Government of Kansas City and Wyandotte County under the Kansas Expanded Lottery Act and approved to develop and manage the facility by the Kansas Lottery Commission.

Construction on the Hollywood themed casino will begin early in the second half of 2010 and is expected to be opened in the first half of 2012.

Peter M. Carlino, Chief Executive Officer of Penn National commented, “Today’s approval formally cements our role in the Wyandotte County community and we are excited to begin working alongside our partner, International Speedway Corporation, and with local businesses to construct a distinctive, first-class entertainment facility and destination resort. Kansas Entertainment is committed to the long-term economic growth of Wyandotte County and the state of Kansas and we believe the Hollywood Casino at Kansas Speedway will be a growth engine bringing over 1,700 construction jobs, over 1,000 full time jobs and significant additional economic benefits to the Kansas City region.”

The commission will meet to discuss the results of the company’s background check, which has already been approved by the Kansas Lottery and a separate casino selection board.

Once the final regulatory approval has been given Penn National and its partner can begin construction on the $521 million project on turn 2 of the speedway.

The initial phase of the casino plan will include 100,000 square feet of casino space with capacity for 2,300 slot machines and 86 table games and a variety of dining and entertainment options.

Phase one has been budgeted at $386 million and is scheduled to open in the first quarter of 2012.

Additional phases will include a hotel, expanded gaming space, a spa, convention center and an entertainment retail district.

In order to secure licensing a commitment was made to petition NASCAR for a second Sprint Cup Series race.

Penn announced today that they have closed on the purchase of 123 acres at the former General Motors/Delphi Automotive plant located on the west side of Columbus.

The gaming company has previously purchased 24 acres in the Arena District, where voters originally authorized the casino during November’s election.

“Closing on this property reflects our ongoing commitment to work closely with Central Ohio’s business and community leaders on this relocation effort, which could, pending voter approval, result in hundreds of millions of private investment dollars for the West Side of Columbus, an area in need of an economic catalyst,” said Eric Schippers, Senior Vice President, Public Affairs, of Penn National. “Our commitment is further reflected in the demolition work and environmental remediation efforts that have already been put in motion at this brownfield site. If the voters of Ohio approve the casino relocation in May, we will quickly move to the next steps in the development of this casino.”

Depending on the outcome of the May ballot, Penn will put one of the properties up for sale and use the other to develop a $400 million Hollywood Casino project complete with 180,000 square foot casino with up to 4,000 slot machines, 100 table games, 25 poker tables, a 4,000 space parking garage plus food and beverage outlets and entertainment lounge.

“We have limited control over how consumers are continuing to respond to economic pressures and as a result, the gaming industry experienced revenue compression again in the fourth quarter,” Chairman and CEO Peter Carlino said.

Penn posted revenue down 2.7% to $555.8 million with the bulk coming from gambling revenue which fell 2.8% and food and beverage revenue which also fell 1.5%.

The company reported a net loss of $355.4 million or $4.54 per share. Stock compensation charges and impairment cost totaled $478.8 million for the quarter, compared to 2008’s fourth quarter net loss of $378.6 million and slightly higher charges of $497.8 million.

Operating earnings came in at $0.11 per share, which fell short of Wall Streets prediction of $0.18 per share.

Wall Street Analyst are forecasting 2010 revenue of $2.52 billion and earnings per share of $1.39, however Penn predicts 2010 revenue to come in at only $2.43 billion and adjusted earnings per share of $1.00.

According to figures released yesterday by the Pennsylvania Gaming Control Board, Hollywood Casino at Penn National Race Course in East Hanover Township saw an increase of 22.4% compared to January 2009.

The casino brought in gross slot revenue of $21.5 million, up from $17.6 million in the same period last year.

With table games recently added to the state’s gaming bill, the Hollywood Casino expects to be able to roll out table games within nine months, said Fred Lipkin, the casino’s director of marketing.

Initially, the casino will add about 50 table games to its facility, which houses 2,000 slot machines.

The partnership has expressed their concerns saying the contract they negotiated with the Kansas Lottery to build a $386 million casino project could be in jeopardy if the law is changed.

Legislatures are looking for additional revenue, and propose reducing the state’s take of slot revenue from 27% to 22% to revitalize closed dog and horse racing tracks that have not installed slot machines because high taxes make them unprofitable.

Karen Bailey, spokeswomen for Penn National denied speculation that financing for the project was in trouble, and reiterated that their particular concern is that the Woodlands racetrack is only a few miles from the proposed casino site.

“Anyone requesting to change the rules at this juncture should have done so when the law was written in the first place,” Thomas Auriemma, president of Penn Hollywood Kansas, the managing member of the venture wrote in a letter to Governor Mark Parkinson and legislative leaders.

Background checks on the partnership and approval of the contract is expected in February which would allow ground breaking in the spring.

While it is not clear if Kansas Entertainment would back out if the law changed, Senator Pete Brungardt says that it should not deter legislators from debating the proposal.

A hearing will be held on February 9 to discuss the Senate proposal.

Effective February 15, 2010, Bill Hayles will assume the position of Assistant General Manager. Hayles has been the General Manager of Penn’s Black Gold Casino at Zia Park since it was acquired by Penn National in April 2007.

John V. Finamore, Senior Vice President Regional Operations of Penn National Gaming, commented, “With his industry experience at casinos offering full gaming, Bill Hayles is an excellent and timely addition to Al Britton’s successful team at Charles Town as the property prepares to take the next step in its evolution with a $40 million expansion for table games and poker and entertainment lounges. Bill will be directly involved in a variety of expansion-related construction projects and the shift at Charles Town to Penn National’s Hollywood brand which is now synonymous with great gaming and entertainment in many of the markets where we operate.”

Hayles will be replaced at Zia Park by Brent Willits. Willits has over 18 years of gaming industry experience and most recently served as Senior Vice President and General Manager of Ameristar Casinos’ property in Council Bluffs, IA.

Thomas P. Burke, Senior Vice President Regional Operations of Penn National Gaming, commented, “We are extremely excited to add Brent to the Penn National team.”

Both appointments are subject to regulatory approval.

Although Penn was the apparent high bidder offering $301 million up front, the Governor announced Friday that he has selected Aqueduct Entertainment Group for the 30 year contract to operate the track’s 4,500 video lottery terminals.

“We were extremely shocked and dismayed by the governor’s announcement, given we offered over $100 million more to the state than AEG in our bid,” said Eric Schippers, Penn National senior vice president. “In addition, our proposal complies with the conditions outlined by the speaker for the winning bidder. We remain committed to this project and will await further details about the selection process before commenting further.”

Tuesday the Ohio Senate approved the measure to go to the House.

The House was also quick to approve the resolution with a 71-26 vote to add the measure to the May ballot ahead of the February 3 deadline.

State Voter’s will now be asked to approve the alternate location for the Columbus Casino, despite the results of the November election.

In November voters approved the development in the Arena District of Columbus, where residents and lawmakers have urged Penn to move to the site of the former Delphi Corp. Plant.

If the issue fails, Penn National would build at the original site.

Peter M. Carlino, CEO of Penn National has reportedly written a letter to the Governor to voice that frustration.

The casino operator has offered the state a $301 million upfront payment for the 30 year contract to manage Aqueduct’s 4,500 video lottery terminals, last fall.

However Paterson and legislative leaders responsible for selecting an operator have yet to reach an agreement, although the New York Racing Association says it will run out of money by June.

In the letter, Carlino voiced his concerns that the lack of news and open discussions has brought about rumors and gossip, the latest of which is that although Penn has submitted the highest bid, other operators may have “a leg up by virtue of their being New York-based companies.”

“If our being a Pennsylvania-based company in any way prejudices us in the bid process, we wish we had known that going in,” Carlino wrote. “We have played by the rules of the game since this process began, despite those rules being changed midstream—namely allowing others to increase their bids to match ours following the original submission.”

“We have more slots at racetracks than any other company in America,” he said.

Carlino reaffirmed Penn’s commitment to seeking the contract and reiterated that Penn’s gaming credentials are without question and that the company has the cash in hand to write a check “to get this ball rolling.”

Penn’s plans include opening a temporary racino with up to 2,500 VLTs within ten months and a permanent facility completed within a year after that.

The tournament will be a series of 28 events held over 21 action-filled days, March 4-24.

The $10,000 000 buy-in World Poker Tour® Main Event, March 20-24, will be the first WPT championship event held in the Midwest and will feature a final table on March 24 that will be filmed for television broadcast on Fox Sports Net’s national television network (FSN).

The main event is expected to attract several top professional players hoping to take home a portion of the $2 million prize pool as well as a WPT Champion Bracelet and paid entry to the WPT World Championship in Las Vegas in April.

The Hollywood Poker Open final table will air on consecutive Sundays, June 20th and 27th on FSN as part of the WPT Season VIII schedule.

A wide range of No Limit and limit Hold’em events, Limit 7-Card Stud, Limit Stud 8 or Better High/Lo, Limit Omaha 8 or Better High/Lo and Pot Limit Omaha events will be featured throughout the tournament.

While the November 3 ballot was passed state wide, it was rejected by Franklin County voters, because they opposed the casino being built in the “family friendly” Arena District.

Yesterday, that measure became one step closer to the ballot, when the Ohio Senate voted to approve the amendment that would permit voters to authorize a change in location.

The measure being referred to as Senate Joint Resolution 8 would change only the location of the casino in Columbus, other casino’s connected to Issue 3 would not be effected.

SJR8 will now go before the Ohio House for further consideration. However, the House must pass the amendment before February 3 in order to appear on the May primary ballot.

If the House does not agree to the changes, Penn has the constitutional right to move forward with the development in the Arena District at the dismay of Columbus and Franklin County residents.

After purchasing a site in the Arena District for the development of the voter approved casino, Penn had agreed to seek an alternate site that would be more in line with the cities visions.

However, the company now must pursue development of the $250 million casino on a parallel track, in case the change of location is not amended in the states constitution.

Although Penn plans on selling the Arena District site if the casino is moved, the new site must also be purchased, building demolished and cleaned up, which will add incremental cost.

Penn National President Tim Wilmott said, “We need to make sure we’re fair to our shareholders. We expect to be taken care of economically so that there will not be an incremental spend on land costs.”

Wilmott stressed that the company will seek tax incentives to develop the alternative Delphi site, although they have said they would not pursue tax breaks for the Arena District site.

Columbus Mayor Mike Coleman has said that he does not oppose Clean Ohio Revitalization Funds being used for environment clean up at the new site; however tax incentives have not yet been “discussed or considered”.

John Barnett, the casino association lobbyist told the Senate Appropriations Committee that its members, including Penn, would rather deal with the issue more comprehensively next year when the state might have money available to offer casinos incentives for new development or adjust their tax rates to compete with Ohio in addition to the option for land-based operations.

Penn told the committee through John Hammond, a lobbyist for the Hollywood Casino in Lawrenceburg, that the revision puts casino operators such as themselves at a disadvantage since they just spent $330 million on new riverboat casino that opened in July.

Penn says that price tag is an estimated $40 million more than they would have had to spend to build on land.

“We didn’t have the opportunity to go land-based, and those are the rules we thought we were playing under,” Hammond said. “The equity of us having making that investment and having to compete with someone right down the road who didn’t have to make the additional investment to make the hull, engines and other things on the boat has created difficulty for our folks.”

The Maryland bankruptcy court has agreed to extend the opening date for bids to give Magna and bidders time to gain a better grasp on whether voters will be able to decide the fate of slots at Arundel Mills mall.

Uncertainty over whether voters will approve the slots casino may raise the stakes and the bids for the tracks by bettering the chances of slots at Laurel Park.

The developer of the Arundel Mills casino, David Cordish, currently holds the only slot license in Anne Arundel County, however if rejected at the polls, the state could reopen the license process allowing the new owners of the racetracks the option of offering slots.

“We have to wait to see what happens with Cordish; that’s obviously a fluid situation right now,” said Eric Schippers, Penn National’s senior vice president of public affairs. “If there is a possibility to have slots there one day, it would be nice to have the option of pursuing.”

Tim Wilmott, President and COO of Penn told local and state officials at a press conference today that after careful consideration of the proposed alternative sites, they believe that the site of the former Delphi Automotive plant on Columbus’ West Side will be suitable for the $250 million-plus casino development.

“Ultimately, we chose the Delphi site because of its excellent highway access, its status as a brownfield site, which fits well with our original vision of urban revitalization, and because it received very strong support from local community and business leaders. In addition, with 123 acres, it provides us with the needed flexibility to develop a comprehensive master plan for the site.” said Wilmott.

Since the alternate site will need to be approved by a three-fifths majority vote by the General Assembly and Ohio voters in May, the gaming company plans to pursue development of both sites in parallel, given the uncertainty of the outcome.

Wilmott also said. “Our goal is to begin development as soon as possible so we begin generating new jobs, as well as gaming taxes earmarked for counties, cities and public schools across the state as well as for Ohio’s horse racing industry.”

Penn issued a press release on Friday saying that they had closed on the 18.3-acre tract at 560 W. Nationwide Blvd., plus six acres adjoining that property.

After the November elections that specified the casino site was to be in the Arena District of Columbus Ohio, Penn was given an option to buy the property through January 30.

While Penn remains committed to being open minded and is currently conducting due diligence on the proposed sites, sources said that the company wanted to secure the property since there was no guarantee that the Ohio legislation would agree to place another constitutional amendment on the statewide ballot to move the casino to another location and there is also no guarantee Ohio voters would approve such a ballot issue.

The purchase price was not disclosed.