The Kansas House Federal and State Affairs Committee voted 11-10 to approve HB 2173, which would revive the dormant racing industry in various parts of the state. State Rep. Tom Sawyer said, “We have a real opportunity here to create some jobs in Kansas and help our horse and dog industry. We lose a lot of people across state lines when they go to Oklahoma, when they go to Missouri to game.”
The bill would allow residents in counties with shuttered racetracks to gather a minimum of 5,000 signatures to re-vote on whether slot machines could be allowed. Three of the racetracks in question are owned by Las Vegas billionaire Phil Ruffin, including Wichita Greyhound Park in Sedgwick County that closed in 2007 after voters rejected allowing slots in the county.
State Rep. Ron Highland said for the racetrack owners “it’s a pathway for private investment. They are not asking for state funds or incentives to get into this business. They are taking a huge risk. They’re willing to pay for that risk. I think we should let them have that privilege.”
However, when state gambling laws were enacted a decade ago, they stated no other gaming facilities with slot machines could operate in the state’s four gaming zones before 2032. Casinos in the zones paid a privilege fee to be the sole gaming facility in that zone. Last spring Kansas Attorney General Derek Schmidt issued an opinion that legislation allowing county residents to vote again on slots would breach the Kansas Lottery’s contract with state-operated casinos.
The state would be required to pay back privilege fees to the casinos plus interest if the bill is found to violate a provision of previous law. State records show it has received $61 million in privilege fees, and interest payments could reach $51 million.
Casinos and other opponents said breaking the contract to allow other gaming operations could result in expensive lawsuits. Kevin Fowler, an attorney representing the Kansas Star Casino and two other casinos in the state, said racing interests want to “change the terms of the bargain. HB 2173 is designed to allow them to reopen closed facilities. That’s going to result in protracted litigation that could potentially expose the state to hundreds of millions of dollars in liability.” State Rep. Susan Humphries added, “I’m concerned about this huge liability that we’re opened up to. We care about the people of Kansas. We don’t want to put them into a bind with a bill that may put them on the book for $110 million or even more for damages.”
But Scott Beeler, an attorney for the Greater Kansas Racing Alliance, said lawmakers should not feel obligated to follow Schmidt’s opinion. “They are opinions and they are not the law of the state. The legislature has every right to change that law or to clarify that law.” He added existing casinos that oppose the legislation simply are protecting their own interests. “This is like a young kid protecting the sandbox. The people who are raking in the money don’t want any competition,” Beeler said.
Whitney Damron, representing Kansas Entertainment, said in 2007, “Phil Ruffin missed a layup. They thought the vote in Sedgwick County was going to be a lock, and they lost it. There’s nothing in the act that says you get a redo. I encourage you to read that attorney general’s opinion. It’s very clear about what the potential impact is.”
Animal-rights supporters also oppose the bill. Humane Society of the U.S. State Director Midge Grinstead said, “HB 2173 is designed to bring back greyhound racing through slot subsidies. Greyhound racing is an inhumane activity that’s largely been rejected.” Animals as Pets Coalition of Kansas President Kate Meghji added, “At the very least just amend the bill and pull out the greyhound racing piece. That’s the important thing. It’s an inhumane sport and I don’t think we want Kansas to be one of only six states that allow greyhound racing.”
House Bill 2173 states each racetrack facility would have a minimum of 400 electronic gaming machines, with the total maximum of 2,500 machines at all of the racetrack facilities. The racetracks would pay $2,500 per machine to the state in a privilege fee. The bill also requires at least 60 days of live horse racing with at least 10 live races conducted in each program. The tracks also must conduct at least three live quarter horse races and seven live thoroughbred races daily. No requirement were included for greyhound races. The bill also spells out simulcasting rules.
Art Hall of the Greater Kansas Racing Alliance, said, “Technology and time have changed the fundamental economics of racing. It’s got to be supplemented by the revenue streams from electronic gaming machines. The mix of entertainment is what customers demand.”
