Sports betting isn’t legal in Kansas but state Senator Rob Olson, chairman of the Senate Federal and State Affairs Committee, said, “We got to figure out a way to get this across the line. This is definitely going to be a focus.”
Olson and other lawmakers said the state is losing millions of dollars as Kansans are no doubt placing illegal, unregulated bets through overseas sportsbooks. Derek Hein, a lobbyist for DraftKings and FanDuel, said, “Kansans without ready access to a legal market in a neighboring state can easily bet using the thriving illegal network of offshore websites that are happy to cash in on customers looking for convenience but lacking legal options.”
Hein cited Oxford Economics and American Gaming Association figures noting Kansans annually bet $1.3 billion on sports through illegal channels, which offer no consumer protections and pay no state taxes.
State Rep. John Carmichael, who served on a special committee in 2018 to consider sports betting, said, “There were folks, quite frankly like me, who feel that expansion of gambling on a societal basis is not necessarily a good idea even though it does generate additional revenue for the state. But I think it’s becoming increasingly clear that online gambling is here to stay. I think it’s rapidly becoming consensus in the legislature that we need to go ahead and regulate the activity in Kansas and attempt to garner some tax revenue from it to hopefully offset some of the consequences.”
Currently, the Senate and House are considering bills to legalize sports betting, with oversight by the Kansas Lottery. Senate Bill 84, which passed the Senate last year but failed in the House, would allow one or more of the state’s four state-sponsored casinos to establish an in-house sports wagering system and set up websites and smartphone apps to allow online and mobile betting. Each casino would be allowed up to three skins. Bally’s already announced it will partner with the Boot Hill Casino to offer Bally Bet as soon as the law allows. Bettors must be on-site at a casino to place their wagers.
The House substitute for SB84 would allow players to bet on sports in person at hundreds of locations. The lottery would contract with up to 1,200 retailers, such as gas stations, convenience stores, restaurants and bars, to offer limited sports wagering. The lottery also would offer online sports betting, and each casino also could request approval to offer an additional skin.
Under the Senate plan, the state would get 5.5 percent of the total betting revenue on wagers placed in person at a casino. The state would get 8 percent on online bets. The House plan calls for the state to receive 14 percent at casinos and 20 percent on bets placed online and at lottery retailers.
However, in hearings regarding SB84 last year, casino operators made it clear they should be the exclusive providers of sports betting. In a joint statement, Kansas Crossing and Boot Hill casinos said, “We believe it is critical that the management of sports betting be limited to existing licensed lottery gaming facility managers. Kansas lottery gaming facility managers have invested hundreds of millions in their brick-and-mortar establishments in this state, are major drivers of job creation and economic activity in our host communities and a significant generator of tax revenue for state and local governments. We have well established, rigorous compliance and responsible gaming protocols in place to ensure a safe wagering environment for consumers.”
Also in support of the House plan, Tom Palace, former executive director at Fuel True, the statewide association of gas stations and convenience stores, said, “We are the largest customers for the Kansas Lottery, convenience stores, grocery stores that sell lottery tickets for the state of Kansas. We should be included in sports wagering because we’re part of the lottery. We have a financial track record with the Kansas Lottery and have the sufficient resources to support the activities required to conduct sports wagering.”
Also under the House proposal, neighborhood lottery retailers could offer Tier 1 wagers, which are placed before a game starts and depend on the final score. Palace said Fuel True would have no problem with local retailers handling those simple bets and letting casinos and their online skins provide Tier 2 wagering, or prop bets. Both the Senate and House proposals would allow Tier 2 betting, but only inside casinos or through their authorized online platforms. DraftKings recently announced it will offer more than 700 prop betting opportunities before and during the Super Bowl.
Carmichael said he prefers the Senate’s legislation, which “would allow the established state-owned casinos, which of course are operated by the big gaming companies, to establish online gaming. In a perfect world, we would limit it to the brick-and-mortar establishments, but that approach is probably not competitive with the other online offerings that are rapidly evolving throughout the country.”
State Senator Jeff Longbine, a member of the Federal and State Affairs Committee, said the House plan is riskier because it puts much more sports betting operations directly under the lottery. He said, “I think one of the major differences between the House and the Senate positions is under the Senate position, the casinos take all of the risk and in the House version, the state takes the risk. That’s a major distinction we need to keep in mind as we move forward.”
State Rep. John Barker summarized, “My leadership wants to get it done this year if it’s a good deal for the state of Kansas. But if it’s not, we won’t.”
