TOPEKA — The Kansas House passed a bill allowing casinos to operate sports betting operations and to earmark 80% of state tax revenue from the new gaming business to a special fund for financing of a professional sports facility.
The Kansas Senate didn’t take up the sports wagering legislation before adjourning until April 25 for the wrap-up portion of the session.
After five years of wrangling on the issue, the House pushed Senate Bill 84 across the finish line Friday night with a surprise amendment dedicating a majority of state revenue from online and in-person betting on sports to bonds for construction, renovation or expansion of sports facilities. The state’s four casinos — established under control of the Kansas Lottery — would operate the sports books.
The stadium provision was slipped into the package negotiated by three House and three Senate members at the request of House leadership. The decision coincided with comments by executives from the Kansas City Chiefs about evaluation of proposals to build an NFL stadium on the Kansas side of the state line with Missouri. Gov. Laura Kelly, in an interview, said she’d welcome the Chiefs to Kansas.
Sporting Kansas City, a team in the MLS, has a stadium in Wyandotte County.
“If we could add another team, that would be great,” said Rep. John Barker, the Abilene Republican and chief negotiator for the House on sports wagering.
In the House, the bill survived an attempt to inhibit passage by sending it back to a committee. It finally cleared the House on a 63-49 vote.
“This was truly a work of compromise of the House and Senate,” said Rep. Louis Ruiz, a Democrat from Kansas City, Kansas. “It’s something we’ve been wanting for a long time.”
Opposition came from representatives skeptical of handing spending authority of the professional sports fund to the Legislative Coordinating Council, which is a mixture of House and Senate leaders from both political parties. Other lawmakers objected on philosophical, moral or financial grounds.
“There is no reason we turn it over to the finance council, who hadn’t told us about it until it came up in the last few minutes of the last day of the session,” said Rep. Henry Helgerson, D-Wichita.
Rep. Francis Awerkamp, a Republican from St. Marys, said he was troubled by state government’s eagerness to encourage sports betting to Kansas.
“From my perspective, this is written for the casinos, by the casinos and of the casinos. Everything in it is a sweetheart deal for them,” he said.
Rep. Steve Howe, R-Salina, said he opposed expansion of gambling in Kansas because it would encourage “sins of greed” and would potentially facilitate addictive behavior damaging to the welfare of families and communities.
The 10% tax on sports wagering revenue in the Kansas bill was paltry compared to tax rates on casino sports book betting in New York at 51%, Pennsylvania at 36%, Tennessee and Arkansas at 20% and Maryland at 15%, said Rep. Paul Waggoner, R-Hutchinson.
“Great for casinos. Bad for taxpayers,” Waggoner said. “Our goal as a Legislature should be to make a good deal for the voters. We’re not here for casinos. We’re not here for the lobbyists. This bill should be rejected.”
The original estimate of annual revenue from sports betting in Kansas indicated the state could collect $1.8 million in 2023, $6 million in 2024 and reach $10 million in 2025.
“This doesn’t pass, Kansas gets nothing,” said Rep. Ken Corbet, R-Topeka. “We need to find some way to make some money.”
Rep. Brett Fairchild, R-St. John, said the ideal approach would be to abandon state-operated gambling operations and let companies or individuals open private casinos. He said he supported the bill because allowing people to voluntary gamble on sports under a system regulated by the state was “better for the cause of liberty than prohibiting gambling all together.”
Under the bill, the Kansas Lottery and the Kansas Racing and Gaming Commission would share oversight of sports wagering conducted through the four state-owned casinos. Each casino could operate up to three online sports wagering platforms. The bill would require state background investigation of platforms preferred by the casinos to begin by Aug. 15. Rules and regulations for advertising of sports betting would be in place by Jan. 1, 2023.
Betters on the casinos’ platforms would have to be physically located in Kansas to submit a wager. The casinos could enter marketing agreements with professional sports teams, including placement of kiosks at the team’s facility to allow fans to place bets.
The casinos could enter marketing agreements with 50 businesses and entities, with one-fifth of the total reserved for nonprofit organizations. Sports gamblers involved in state-sanctioned betting would have to be 21 years old.
The proposed law would require $750,000 annually in state gambling tax revenue be diverted to the White Collar Crime Fund. In addition, 2% of state revenue from sports betting would go to the Problem Gambling and Addiction Grant Fund.
The remainder would be funneled to the Attracting Professional Sports to Kansas Fund. The State Finance Council could pledge all or part of the fund to pay principal or interest of any bond issued by the state or a municipality for construction, rehabilitation or expansion of a professional sports team’s primary facility or a related development at that primary facility.
The bill would enable any federally recognized Native American tribe to submit a request to the Kansas governor and Kansas Lottery director to operate a sports book “under the substantially same terms and conditions” that were applied to the state’s four casinos.
In addition, the legislation adopted by the House authorized wagering exclusively in Sedgwick County on “historical” horse races. Other states offering this form of gambling rely on video of thousands of past races that enable gamblers to place bets on the outcome. Operators could install no more than 1,000 horse-race machines. Bets on these races couldn’t be placed over the internet or by cellular telephone. This type of gambling wouldn’t be allowed at facilities offering live or simulcast greyhound races.