Kansas Legislature’s late-night surge covers sports betting, budget, KPERS and COVID-19

Lawmakers to return in late May for closing bell of 2022 session

by Tim Carpenter, Kansas Reflector

Topeka — The House and Senate completed a flurry of votes early Friday sending to Gov. Laura Kelly bills legalizing sports gambling, investing more than $1.1 billion in the state’s pension system and blocking government mask mandates for all contagious disease outbreaks.

The 2022 Legislature, which plans to return to Topeka in late May to complete the annual session, also plowed through legislation adding details to the state budget for the fiscal year starting in July. An unprecedented influx of tax revenue — lawmakers had a $3 billion surplus to work with — allowed lawmakers to craft a state budget designed to hold in reserve nearly $2 billion in the treasury for rainy-day funds.

Fate of Senate Bill 84 creating the opportunity for state-owned and tribal casinos to be in the business of sports wagering was unclear until the Senate’s 21-13 vote, which involved six Republican senators passing. The same bill easily cleared the House on a vote of 73-49. The gambling expansion measure passed with backing from Republicans and Democrats.

Sen. Rob Olson, R-Olathe, said the bill would bring under state law sports betting conducted through off-shore platforms or in the black market. It would bring Kansas in step with more than 30 states that had some form of legal wagering on athletic events and would create jobs in the state, he said.

“Kansans are already betting on sports,” said Sen. Jeff Pittman, a Leavenworth Democrat who also voted for the bill. Sen. Pittman, D-5th Dist., also represents part of Wyandotte County. “Many do it on illegal platforms that take money out of the state. Sports betting is not for everyone. This is just another avenue for avid players.”

Opponents asserted the bill violated contracts with the four designated state casinos, endangered the well-being of adults and youth, produced a paltry amount of state tax revenue and questionably set aside most of that cash in a special fund to attract the Kansas City Chiefs to Kansas.

“We will destroy people’s lives,” said Sen. Mark Steffen, R-Hutchinson. “We don’t know their names right now. We don’t know what they look like. But we do know that will happen.”

The Senate and House also forwarded to Kelly a bill that would transfer $1.125 billion from the state general fund to the Kansas Public Employees Retirement System. Under Senate Bill 421, the state would pay off $253 million owed to KPERS for payments withheld by the Legislature in fiscal years 2017 and 2019. The bill also earmarked $853 million to be deposited in KPERS by June and an additional $271 million by December.

Critics of the legislation said they welcomed investment in a pension system serving more than 315,000 Kansans, but would prefer some of that cash be spent to immediately end the state’s 6.5% sales tax on groceries. Another idea rejected by the Legislature was to cut a check to KPERS retirees in the form of a 13th monthly benefit check at a cost of $143 million.

“We could afford to do that,” said Sen. Pat Pettey, D-Kansas City, Kansas. “I think we shortchanged them. We didn’t move in the right direction.”

Sen. Richard Billinger, the Goodland Republican and chairman of the Senate Ways and Means Committee, said paying off debt to KPERS and making upfront contributions into the system would free more than $460 million over the next five years for other government priorities. He based that projection on KPERS’ portfolio earning returns of 7.75%, but advisers to KPERS said that high of return was unlikely.

“We made a promise that when they retire they would get a certain amount of money,” Billinger said. “I’m working to make sure when they retire they get every penny they were promised. Nothing less.”

The KPERS bill was approved in the House 106-10 and by the Senate 26-10.

Meanwhile, the Legislature sent to the Democratic governor a revised state budget in House Bill 2510 that would leave the state with a treasury balance of more than $1 billion in June 2023 and with $750 million in a budget stabilization fund. The votes were 33-7 in the Senate and 95-22 in the House.

“Our course of direction and action for this year was to pay off debt, put money away in savings and have one-time investments,” said Rep. Troy Waymaster, a Bunker Hill Republican and chairman of the House Appropriations Committee. “That’s what we looked at when we were going through budgets this year given the surplus we had when we started this session.”

He pointed to a provision in the budget retiring $332 million in bond debt owed on dredging of John Redmond Reservoir, construction of a building at University of Kansas Medical Center, development of the National Bio and Agro-Defense facility in Manhattan and building the KBI’s crime lab at Washburn University.

The Legislature passed a separate bill that would gradually reduce the state’s 6.5% sales tax on groceries by 2025. One-time investments in the budget were made in universities, community colleges, technical colleges and the Kansas State Fair with cash tied to federal economic relief grants to Kansas, Waymaster said.

“We’ve got ourselves in a great position in event of a downturn,” said Rep. Kathy Wolfe Moore, D-Kansas City, Kansas. “We’ve got plenty of money set aside in a rainy-day fund. We have a great ending balance and we’re paying off debt.”

Near the end of a lengthy work day that stretched to 2 a.m. Friday, the Legislature sent the governor Senate Bill 34. It would prohibit any state or local government entity or official from imposing a mask mandate in response to an infectious disease outbreak.

The measure inspired by opponents of general vaccination requirements was adopted 64-53 in the House and 23-17 in the Senate.

Sen. Kellie Warren, the Leawood Republican seeking the GOP nomination for attorney general, said the COVID-19 pandemic opened a Pandora’s box that violated individual liberties of Kansans. The Legislature conducted hearings that produced testimony about government overreach in the workplace, schools and churches, she said.

“What we heard is not pretty,” Warren said. “This bill is reasonable.”

Rep. John Eplee, an Atchison Republican and family physician, joined Republicans and Democrats in both chambers who said extending restrictions created in reaction to the COVID-19 pandemic into a sweeping public-health prohibition in terms of all infectious diseases was irresponsible.

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.
See more at https://kansasreflector.com/2022/04/29/kansas-legislatures-late-night-surge-covers-sports-betting-budget-kpers-and-covid-19/

House passes compromise sports gambling legislation; bill’s fate rests with Senate

Proposal builds on controversial casino gambling law adopted in 2007

by Tim Carpenter, Kansas Reflector

Topeka — The Kansas House approved a compromise bill Thursday creating opportunities for tribal or state-owned casinos to engage in the business of online and in-person sports betting.

The measure would need to be adopted by the Kansas Senate before forwarded to Gov. Laura Kelly, who has expressed support for sports gaming in the past.

“I’ve got guarantees this will run in the Senate,” said Sen. Robert Olson, an Olathe Republican and lead Senate negotiator on the bill.

Rep. John Barker, R-Abilene, said the bill had bipartisan support and was an outgrowth of about five years of effort. The GOP-led chamber voted 73-49 to affirm the agreement reached by House and Senate negotiators.

Opponents questioned the wisdom of growing an industry that contributed to downfall of an estimated 65,000 problem gamblers in Kansas. They argued the 10% state tax on sports gambling generating $1 million to $5 million in annual revenue was an insufficient incentive to legalize the activity. The four state-affiliated casinos could make $9 million to $45 million annually on sports books.

“Those 65,000 gambling addicts in this state, we’re selling them out. That’s like dropping a bomb on those 65,000 families,” said Rep. Pat Proctor, a Leavenworth Republican who said he’d never bought a lottery ticket. “We have created this monster.”

Rep. Tom Burroughs, a Democrat from Kansas City, Kansas, said the state didn’t have the right to tell Kansans how or where they spent disposable income.

“We have gambling. We have the lottery. It doesn’t have the ill-fated consequence that many of you think it will bring forward,” Rep. Burroughs said.

Rep. Tory Awerkamp, R-St. Marys, said the Legislature should shelve the bill because it was crafted by casino companies or lobbyists. It would be better if the Kansas Lottery operated sports betting because the state would collect profits sought by the casinos, he said.

“It’s not something I think we should grow in Kansas, but if we do lets do it in a way that reflects the best interests of the people,” Rep. Awerkamp said.

The bill included a provision funneling 80% of state revenue from legal gambling on sports into a Kansas Department of Commerce fund that could be used to support establishment of a professional sports facility in Kansas. This section of Senate Bill 84 was intended to express support for movement of the Kansas City Chiefs across the state line from Kansas City, Missouri.

The state-owned casinos in Dodge City, Pittsburg, Mulvane and Kansas City, Kansas — established under control of the Kansas Lottery — would be permitted to operate sports books. Tribal casinos would be able to negotiate with state officials to engage in sports wagering.

Negotiators addressed a key obstacle by deleting a provision in the bill that contemplated Wichita businessman Phil Ruffin would compensate owners of Kansas Star Casino in Mulvane if a court determined initiating a system of betting on historic horse races at a Ruffin facility in Sedgwick County violated existing gaming agreements.

Under an earlier version of the sports betting bill, Ruffin would have made a payment of approximately $70 million to Kansas Star Casino to cover violations of existing agreements and Ruffin would be reimbursed through gaming revenues.

Ruffin’s representatives contend the financial arrangement was unnecessary because betting on historic horse races was legal under parimutuel law in Kansas, because these devices weren’t equivalent to slot machines.

Other states offering this form of horse-race gambling rely on video of thousands of past races to enable gamblers to place bets on the outcome.

Under the pending legislation, the Kansas Lottery and the Kansas Racing and Gaming Commission would share oversight of sports wagering. Each casino could operate up to three online sports wagering platforms. 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 franchises, including placement of kiosks at a 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 bill would enable federally recognized Native American tribes to submit a request to the Kansas governor and Kansas Lottery director to operate a sports book “under the substantially same terms and conditions” applied to the state’s four casinos.

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.
See more at https://kansasreflector.com/2022/04/28/house-senate-prepare-for-votes-on-compromise-sports-wagering-legislation/

Kansas House unveils sports gambling plan with support of casinos, opposition by greyhound industry

by Sherman Smith, Kansas Reflector

Topeka — The Kansas House unveiled Tuesday a plan for legalizing sports wagering in Kansas through online platforms and bets placed at casinos, convenience stores and racetracks.

House Bill 2740 has widespread support from gaming interests that have squabbled for years over who gets to control the action and how to slice up the revenue.

“I never thought this day would get here,” said Rep. John Barker, an Abilene Republican and chairman of the Federal and State Affairs Committee.

The committee heard testimony in support of the bill from three state casinos, a tribal casino, the Sporting Kansas City soccer team and a lobbyist for billionaire Las Vegas casino owner Phil Ruffin, who for years has tried to resurrect operations at his now-closed Sedgwick County horse track. The only opponents to offer testimony were concerned by restrictions placed on greyhound racing.

Animal rights and gambling addiction organizations expressed concerns while asking for their testimony to be considered neutral.

The bill authorizes sports gambling by allowing the Kansas Lottery to contract with gaming facility managers. Those managers could offer wagering through websites, interactive mobile applications and on site. The legislation also allows wagering on machines at Ruffin’s facility, but it bans machines at greyhound races.

The state would get 20% of revenue through online gambling and 14% from in-person bets. Whitney Damron, a lobbyist for Hollywood Casino at the Kansas Speedway in Kansas City, Kansas, said revenue estimates suggest the state could receive $50 million in annual revenue. An official fiscal note has not yet been determined for the new House bill.

Jim Gartland, executive director of the National Greyhound Association, and Mike O’Neil, representing the Kansas Greyhound Association, submitted written testimony that named Ruffin and raised concerns about his influence on the bill.

“This is akin to letting a McDonalds franchise owner write the laws on what other fast food companies are allowed to be operated in the state,” Gartland said.

O’Neil said provisions of the bill dealing with greyhounds are not germane to the subject of sports betting.

O’Neil also asked that lawmakers not make judgments about greyhounds unless they have the opportunity to tour a facility.

“Believe me,” O’Neil said, “if there were such a thing as reincarnation, I’d want to come back as a Kansas greyhound. They’re the sweetest athletes you’ll ever meet.”

Barker said the committee would consider amendments and take action on the bill next week. If the House were to adopt the legislation, representatives would have to work out a deal with senators who passed a competing bill last year.

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.
See more at https://kansasreflector.com/2022/03/22/kansas-house-unveils-sports-gambling-plan-with-support-of-casinos-opposition-by-greyhound-industry/
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