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Read Full BioWarHorse Gaming has refinanced $300 million in startup loans with a new five-year deal that will fund the construction of a casino in South Sioux City.
In addition to funding the South Sioux City project, the company will also use the funds to expand its two existing casinos in Nebraska. WarHorse operates two state-regulated casinos at horse racetracks in Omaha and Lincoln.
In a press release, Lance Morgan, CEO of Ho-Chunk, Inc., the parent company of WarHorse Gaming, commented, “WarHorse Gaming is Nebraska-grown and owned. We believe in providing a world-class gaming experience, while investing in our communities, our state, and the Winnebago people.”
Owned by the Winnebago Tribe of Nebraska through Ho-Chunk, Inc., WarHorse Gaming formed after voters approved the expansion of casino gaming at licensed horse tracks in 2020.
Record Revenue Results in Rapid Refinancing
The funds were secured in less than a month by U.S. Bank, with participation from Capital One, KeyBank, The Huntington National Bank, BOK Financial, and Comerica Bank.
Morgan said, “This rapid refinancing shows our bank partners value what we’re doing, and see the great potential ahead. We are proud to have them join us for this next big chapter.”
Investors are quick to approve the deal as WarHorse has reported record revenue following the full opening of its Omaha casino earlier this year. The venue opened in August of last year, prior to its expansion to include 1,200 slot machines.
The newly secured funds will help finance the opening of the $50 million racetrack and casino project in South Sioux City next year.
Nebraska Expands Casinos & Regulates Skill Games
In addition to the third WarHorse venue in the state, the Lake Mac Casino & Racetrack opened in August. At the same time, the state has regulated skill games to collect revenue from the machines found across the state.
In 2011, the Nebraska Supreme Court classified certain machines as games of skill. This has led to the widespread adoption of gaming terminals across the state. It is estimated that there are as many as 5,500 skill game terminals across 1,600 locations in Nebraska.
Critics argue that the machines are gambling and lead to increased rates of problem gambling in the state. Nebraska Council on Problem Gambling Executive Director Mike Sciandra said he lost thousands of dollars on the machines.
The state now imposes a 5% tax on net revenue from the machines. State Sen. Tom Briese supported the tax, stating, “I see these machines as another revenue source. If they’re going to be out there, they need to be taxed.”
The funds secured to finance WarHorse’s expansion will also contribute to more tax revenue for the state. At the same time, critics would argue that the funds are coming from Nebraska residents who will need increasing levels of help if they continue losing money gambling.
