The Kansas Senate recently voted 17-20 against Senate Bill 427, which would have lowered from 40 percent to 22 percent the state’s share of slot machine revenue at dog and horse racetracks. Supporters said the move to reform a 2007 state law could have attracted investors for the shuttered facilities in Sedgwick, Wyandotte and Crawford counties.
Before narrowly voting against the bill, senators rejected an amendment authorizing sports wagering if the U.S. Supreme Court lifts the federal ban.
Currently the state-owned casinos permitted under Kansas law, in Sumner, Ford, Crawford and Wyandotte counties, pay 22 percent on gaming revenue. None of the racetracks eligible for slot machines have opened.
The bill, said state Senator Bruce Givens, would have created “the opportunity to, what I like to call, right the wrong. The wrong was when the legislature raised the tax share from 22 percent to 40 percent. Under the bill, they would be the same at 22 percent.”
Billionaire businessman Phil Ruffin, owner of Wichita Greyhound Park near Park City, the Woodlands in Kansas City, Kansas and Camptown Greyhound in Frontenac, pushed for lowering slot machine revenue at racetracks for years, arguing the 40 percent tax would make the tracks unprofitable.
The bill also would have allowed Sedgwick County residents to reconsider a vote rejecting slots at tracks. Senate President Susan Wagle predicted the county’s voters would change the outcome and support racinos because “this is good economic development for the state.”
The bill also would have required racetracks to offer a specific number of live races in order to be eligible for slots; 60 days of live racing would have allowed the tracks to offer simulcast wagering.
The Senate bill also would have lowered the privilege fee racetrack operators pay per slot machine from $3,750 to $2,500, and it decreased the minimum number of slots per facility from 600 to 400. Statewide, racetracks could offer a total maximum of 2,800 slots.
In addition, the bill proposed having the state attorney general ask the Kansas Supreme Court to rule on legality of the proposed changes. In 2016, Kansas Attorney General Derek Schmidt wrote that amending the state’s gambling law would violate contracts between the Kansas Lottery and casino operators. House and Senate committees heard testimony indicating the state’s four casinos probably would demand $130 million in fees paid and interest accrued.
State Senator Ty Masterson, who voted against the bill, said, “There is a breach of contract. There’s no question those contracts were meant to be punitive. It’s almost like we have a masochistic desire for protracted litigation. I don’t understand what we’re doing.” Other opponents of the legislation said the casino managers could sue the state to recover loss of market share resulting from lowering the slots tax rate at horse and dog racetracks.
State Senator Jeff Longbine voted “no” because the bill did not require horseracing to return at the Woodlands. State Senator Steve Fitzgerald asked, “Can we force these facilities to open? We’re a government, but not that kind of government. We ought to get out of the way and let the free market work.” And state Senator Vicki Schmidt objected to the bill because it would affect casinos’ annual payments of $513 million to the state treasury and $70 million to local governments. “Why would we want to risk that source of revenue?” she said.
Supporters of the legislation noted it could create 4,000 jobs and strengthen the horse and greyhound industries in Kansas. Senate Minority Leader Anthony Hensley said, “It will revive an industry that really needs our help. We need to give the racetracks a second chance.”
Lawmakers added an amendment requiring state regulators to include rules safeguarding racing horses’ and greyounds’ well being.
