Lawmakers Click Their Heels But Can't Legalize Sports Betting In Kansas

February 11, 2022
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As lawmakers face an early May recess of the 2022 Kansas legislature session, committees in both the House and Senate have yet to seriously consider whether to move forward with a previous bill or any new proposals to legalize sports betting in the state.

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As lawmakers face an early May recess of the 2022 Kansas legislature session, committees in both the House and Senate have yet to seriously consider whether to move forward with a previous bill or any new proposals to legalize sports betting in the state.

The Senate last year passed Senate Bill 84, which was subsequently amended by the House Committee on Federal and State Affairs. The amended legislation failed to pass to final action on the House floor, allowing lawmakers to take it up again in 2022.

A few days after lawmakers gathered in Topeka for the start of the new session on January 10, the Senate Federal and State Affairs Committee held an informational hearing on sports betting, but have yet to return to the topic, as the committee considers a series of budget and election bills.

On Tuesday (February 8), the committee approved draft budgets for the Kansas Lottery and the Kansas Racing and Gaming Commission for fiscal year 2022-2023. Neither presentation included potential revenue from legalized sports betting.

“This is definitely going to be a focus of how to move forward and get this bill completed. My intention is to try and find where we can fix this thing,” said Republican Senator Rob Olson, who chairs the Senate committee which handles bills involving gambling.

Since last month’s hearing, Olson has been meeting with some of the stakeholders involved trying to figure out how to get a bill through the legislature and onto Democratic Governor Laura Kelly’s desk for her signature.

Olson estimates legalized sports betting could be worth $25m to $35m annually to the state.

Neither committee has scheduled another hearing on sports betting, and the House substitute for SB 84 is currently sitting on the House floor.

Despite efforts to legalize sports betting, a report prepared by the Kansas Revisor of Statutes office highlighted significant differences between what the Senate passed and what the House proposed, including who will conduct wagering.

Senator Jeff Longbine, a Republican, described the discrepancies as philosophical differences.

The bill, which passed the Senate in late February 2021, would authorize the state’s land-based casinos to conduct sports betting on behalf of the Kansas Lottery via retail sportsbooks in their facilities. The lottery would be the regulators that licensees the “sportsbook managers.”

But in the House substitute for SB 84, some 1,200 lottery retailers would be allowed to contract with the Kansas Lottery to offer sports betting. The lottery would also allow the lottery to contract with the state’s casinos and racetracks to manage and operate wagering on behalf of the state.

The House version would allow the lottery to have its own platform, while the Senate version would not.

“Under the Senate position, the casinos take all the risks and under the House version the state takes the risk,” Longbine said during last month’s informational hearing. “I think that is a major distinction that we need to keep in mind as we move forward.”

The Senate bill would allow for three skins per licensee, while the House would allow for one.

Some other key differences include: the House bill requires the use of official league data to settle in-game wagers, but the Senate bill does not; and the Senate bill calls for 5.5 percent of gross gaming revenue from in-person wagers and 8 percent from mobile bets to got to the state, while the House bill sets those rates at 14 percent for retail and 20 percent of mobile sports betting.

Slots Machines, Historic Horseracing

On Olson’s committee agenda is also determining if Senate Bill 404, which would legalize historic horseracing machines and slot machines at the defunct Wichita Greyhound Park racetrack in Sedgwick County, should be forwarded to the Senate for its consideration.

The Senate Federal and State Affairs Committee is scheduled to take up the bill on Wednesday (February 16). SB 404 would amend the Kansas Expanded Lottery Act and the Kansas Parimutuel Racing Act to allow voters to vote on whether to allow the state lottery to operate machines at the racetrack.

“Under current law, the state is prohibited from entering into management contracts for more than four lottery gaming facilities or similar facilities until July 1, 2032,” Adam Proffitt, director of the Kansas Division of Budget, wrote in a memo to the committee.

Proffitt said the bill would redefine the enforceable provision that “similar gaming facilities” do not include racetrack gaming facilities.

The bill would also authorize the operation of historical horseracing machines at pari-mutuel racetracks with the machines needing approval by the Kansas Racing and Gaming Commission. Proffitt said the machines would be taxed at 3 percent and the commission would have until January 1, 2023 to adopt rules and regulations.

It is not the first time lawmakers have introduced a measure to allow the county to hold an election on the issue.

House Bill 2537 was introduced in 2016 but failed to gain legislative approval. Lawmakers also rejected a similar slot machine bill in 2017 and then again in 2018.

Proffitt told the committee the proposed changes could provide an incentive for the Woodlands Racetrack in Kansas City, Wichita Greyhound Park and Camptown Greyhound Park to negotiate with the lottery to reopen the facilities as horse-only racetracks with slot machines or historic racing terminals.

In addition to enabling a vote in Sedgewick County, the bill would reduce taxes on slot machine revenue in northeast Kansas to allow racetracks to retain a larger share of the profits. The rate would decline from 75.5 percent to 25 percent.

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