Kansas sports wagering bill earmarks 80% of state revenue to pro sports stadium

House passes legislation, but Senate adjourns without voting on bill

by Tim Carpenter, Kansas Reflector

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.

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.
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Kansas sports wagering plan hits snag after leadership-backed amendment fails twice

by Noah Taborda, Kansas Reflector

Topeka — The future of a plan to legalize sports wagering in Kansas is up in the air after a House committee abruptly adjourned Tuesday when an amendment proposed on behalf of legislative leadership failed twice.

House Bill 2740 has widespread support from gaming interests that have for years debated who gets to control the wagering action and how to divide the revenue. The measure authorizes sports gambling by allowing the Kansas Lottery to contract with gaming facility managers.

Managers could offer wagering through websites, mobile applications and on-site. The state would get 20% of revenue through online gambling and 14% from in-person bets.

The bill looked primed to pass out of the House Federal and State Affairs Committee after a lengthy debate, but when a motion to reconsider a previously rejected amendment proposed by Rep. John Barker on behalf of House leadership came up short, the meeting ended without a resolution.

“I am surprised,” Barker, an Abilene Republican and committee chairman, said. “We are adjourned.”

The amendment would have removed a provision allowing the lottery to sell online tickets. Ultimately, the loss of $11 million in potential revenue in the first year of implementation dissuaded representatives from both sides of the aisle from supporting thr amendment.

Kansas Lottery estimates indicated sports wagering would generate additional revenue for the state of $1.8 million in 2023, $6.0 million in 2024, and $10.0 million in 2025.

“Sit tight, guys, we’ll get this out this year,” said Rep. Stephanie Clayton, an Overland Park Democrat, in a tweet shortly after adjournment. “Communication and teamwork are key, and sometimes communications break down. We can fix this; I’m sure of it.”

The Kansas Lottery has previously attempted to get iLottery into bills with sports wagering, but casinos have considered it a deal breaker.

It is the second week in a row a meeting on the bill has ended without a vote. The committee can reconvene this week and can consider the bill again, but time is running out for the long-sought measure.

The only opponents to testify during the hearing last week 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.

Several other minor amendments did receive committee approval. The other failed amendment would have given the state lottery control instead of casinos, which would likely doom the bill.

Rep. Francis Awerkamp, a St. Marys Republican, said the amendment would mean more money to the state general fund instead of to casinos.

“Right now, we are looking at a new revenue stream, new gambling options, and so you have a choice on who gets the money,” Awerkamp said. “If we let the casinos contract out, we get a small percentage of the money. If we let the Kansas Lottery contract out, we get all of it.”

While many legislators either agreed with the amendment or liked the idea, it failed after Barker reminded the committee it would turn the state’s gaming industry against the bill.

“The casinos are not on board. The other parties are not involved. The retailers are not on board,” Barker said. “I can’t think of anybody that’s on board.”

Kansas Reflector stories, www.kansasreflector.com, may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0.


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