The state Senate in Kansas approved a sports betting bill last month, despite objections by lawmakers on both sides of the aisle. Some critics complained the bill favors companies managing the state’s four casinos.
The House has its own legislation in the works, which is significantly different than the Senate version.
Rep. Don Hineman told Legal Sports Report that Governor Laura Kelly won’t support the sports betting bill as passed by the Senate, because she wants more money in the bill through the online lottery.
“There will definitely be some changes on the House side,” Hineman said.
Under the Senate bill, bettors can place wagers at casinos or online. The state’s four casinos include Hollywood Casino at Kansas Speedway in Kansas City, Kansas Star Casino in Mulvane, Boot Hill Casino in Dodge City and Kansas Crossing Casino and Hotel in Pittsburg. The legislation also permits a limited number of lottery ticket sales online, according to the Associated Press. The casinos would negotiate deals with digital platform providers.
Supporters don’t see sports betting as a big moneymaker since 95 percent of the money wagered would go back to bettors.
“It certainly puts us in a position where we can establish sports gaming in Kansas and pull, hopefully pull, wagers from a black market, off-shore, unregulated, untaxed market and bring it into Kansas under a regulated, safe market,” said Senate Vice President Jeff Longbine, a Republican from eastern Kansas.
Senate Democrats complained that the proposal gave too much control to the companies managing the casinos. Instead, the bill should have insisted on separate sports-betting contracts with the lottery. Critics also opposed restrictions on online lottery sales.
Moreover, the lottery is barred from using a slot machine sound or visual in plugging sales and won’t let someone play more than a game at a time.
The lottery says it could boost sales $3 million a year under the bill but by as much as $26 million if the provisions were less restrictive.
The state would get 7.5 percent of the profits for bets placed inside the casinos and 10 percent of the profits for bets placed online. Some of the state revenue would funnel into the Horse Fair Racing Benefit Fund and to establish a new White Collar Crime Fund for investigations led by the Kansas Attorney General’s Office. The chamber also adopted a proposal by Senate President Susan Wagle, a Republican from Wichita, to divert 2 percent of revenue into a state fund for treating gambling addiction.
“We’re very happy with SB 283 as it passed the Kansas Senate,” said Jeff Morris, vice president of public affairs for Penn National Gaming. “I think it has some of the best practices we’ve learned from other states on how to make a successful sports betting law. The tax rate is comparable with neighboring states. Iowa is 7.5 percent and Colorado is 10 percent, so it’s right there in the middle and allows us to compete with those markets.”
The proposal is expected to unleash up to $600 million in sports bets in the first year, but the state’s cut would be no more than $3 million. Senator Tom Holland, a Democrat from northeast Kansas, said he was afraid the state is “leaving money on the table.”
Holland introduced an amendment to shift profits away from casino operators and into state coffers. Under his proposal, which failed to win support, the Kansas Lottery would have control over online gambling for sports and, potentially, other games, according to the Topeka Capital-Journal.
The House will hold hearings later this month on its version. Republican chairman John Barker said that the House bill includes a larger share of the revenue and would allow hundreds of retail stores that sell lottery tickets to accept simple bets on sports. Barker developed H 2671 in collaboration with the governor’s office.
“We thought we would spread it out,” Barker said. “You could be able to go down and buy a lottery ticket and bet on the K-State-KU game, hopefully buy a loaf of bread and 10 gallons of gas or whatever and go home.”
Hineman says the tax rate for the House bill is too high. He also thinks the way the bill allows sports betting in Kansas at more than 1,200 lottery retail vendors in the state is problematic in the heavy competition it provides for casinos.
Another logjam concerns whether Kansas should try to revive long-closed dog and horse racing tracks. State law allows slot machines at the tracks, but critics say the state taxes are too high for them to be profitable. The Senate voted against lowering the tax rate for a park in Kansas City, for example.
Senator Kevin Braun, a Kansas City Republican, introduced a plan to bring business back to the Woodlands, a horse and dog racetrack in his district that opened in 1989 and filed for bankruptcy in 1996. The Woodlands was purchased by Kansas billionaire Phil Ruffin in 2015. If revived, the track would include horse racing but no greyhound racing.
Braun’s amendment would have slashed the state’s cut of profits from slot machines at the Woodlands, which would ignite a court battle with casinos.
The deadline for legislation to pass in Kansas is April 3. If the House passes the Senate bill with changes, it would need to go to a conference committee.
The legislature will return April 27 to wrap up the session by addressing bills vetoed by the governor: the omnibus appropriations act and omnibus reconciliations spending limit bill.
