Kansas sports activities betting invoice is beneath scrutiny by state lawmakers

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Kansas City Chiefs fans weren't the only people in Kansas who would have been disappointed with Sunday's Super Bowl.

Sports bettors have likely been disappointed, too, as the legislative deadlock in recent years has prevented the state from allowing betting on live sporting events, an activity that nearly 20 states have legalized since 2018.

However, the legislature is ready to start over with the hope that the desire for new sources of income as well as the demand from sports-hungry residents will finally provide the necessary boost to implement some form of sports betting.

The Kansas Lottery has estimated that up to $ 600 million in bets could be placed annually and casinos are optimistic about future growth potential.

"We believe legal sports betting has the potential to give the Kansas gambling industry a meaningful shot in the arm and provide new revenue streams for the state of Kansas," said Jeff Morris, lobbyist at Penn National Gaming who runs Hollywood Casino on the Kansas Speedway in Wyandotte County.

However, significant differences persist between competing proposals in the House of Representatives and the Senate, reopening similar debates from previous years and setting the stage for some high-profile business.

"All interested parties continued their discussions and continued to seek common ground," said Senator Jeff Longbine, R-Emporia. "I'm confident they have found that in many areas."

Why is Kansas Trying to Legalize Sports Betting?

The days of having to travel to Las Vegas to bet on live sports events are long gone, thanks to a 2018 US Supreme Court ruling that allows sports betting across the country.

Currently 19 states have legalized sports betting. Voters in Maryland, Louisiana and South Dakota approved election initiatives in November to join the list in the coming months.

But a minority of bettors actually go to a casino to place their bets on a physical sportsbook. Most use mobile applications to allow sports fans to bet from their couch. Penn National estimates that nearly 70% of betting is on mobile devices.

Proponents argue that sports betting is already happening in the state, only on the black market via offshore gambling companies. Legalizing the practice could increase regulation while providing more resources for people addicted to gambling.

How much money could sports betting make for Kansas?

And there is also a lot of money at stake, albeit not as much as other forms of play are currently bringing into the public purse.

It is estimated that 95% of the proceeds from betting on sports events are returned to bettors, much higher than from slot machines or table games. This leaves a smaller chance for revenue, both for the casino and for the tax collector.

But depending on how the legislation is written, sports betting could fetch more than $ 3.5 million annually for the state, the Kansas Lottery estimated, though the agency noted that this could increase as the option became more established.

Legislation in each chamber would raise money for the state's problem gambling fund, which helps raise money for addiction treatment. It would also raise money for a new unit in the attorney general's office to investigate gaming-related crimes.

A key difference between the Senate proposals and the house versions of the bill is how big a piece of cake would remain for the state.

The Senate bill would cut the state by 7.5% or 10% of all revenue, depending on whether bets were placed online or at a physical sportsbook. This percentage is higher in the household bill, with the state receiving 14% and 22% respectively.

Barker said it was important to make sure the state deserved a fair cut, which he didn't believe the Senate bill did.

"It was written by the casinos in my opinion," he said. "It's all about the casinos. We took a different approach."

But Morris, the executive branch of Penn National, argued that it was important that taxes in Kansas match those of other states in the region.

In reality, the tax rate varies widely between nearby states. Iowa has a rate of 6.5% while Arkansas is more than double that. Colorado is somewhere in between at 10%.

How would the process work?

The other major sticking point in the past has been the actual design of the program, with major ramifications for Kansans interested in placing bets.

Senate law gives casinos a lot more power as the Kansas Lottery has the authority to negotiate sports betting deals with each of the state's four gaming establishments.

The casinos would then actually run the programs under the supervision of the lottery. Each facility could work with up to two sports betting companies for administrative purposes.

Casinos argue this would help the state as it would bring in more license and tax revenues without compromising the integrity of operations. The four nationally recognized tribes of the state could negotiate contracts directly with the governor.

But Barker and his colleagues in the house preferred another method that they believe will spread the wealth.

The House suggests that convenience stores or retailers selling lottery tickets could also participate in sports betting by offering simple bets on the outcome of games.

More complex "in-game" bets – such as how many touchdowns the Kansas City Chiefs will score in the second half of a game – would still fall within the purview of the casinos that Barker said were always under the model still have "an advantage".

He added that it would be good for the entire state to give local retailers a chance to get involved in sports betting, outside of the counties that already have casinos.

“While they're in a supermarket, they might buy gasoline, they might buy some bread or milk,” Barker said. "And that helps the local economy. The casinos want everything to be controlled by them."

But Longbine said running sports betting directly through the Kansas Lottery would hold the state responsible if losses in any given year outweigh profits.

He also argued that since the lottery is tasked with overseeing the game, it would actually seek to maximize profits from a program that it oversees.

"It's hard to regulate yourself," he said.

There are other details as well. Some, including Governor Laura Kelly, want virtual tickets to be added to the lottery program at the same time. They argue that upgrading is needed to ensure that it stays competitive with expanded games. That would be allowed under the Senate's bill.

And both Sporting Kansas City and Kansas Speedway are pushing for regulations that allow them to place bets directly at their facilities with the help of a sports betting company. Such arrangements are common in other states and the teams argue that they help keep fans wanting to fill the stands.

Will sports betting actually exist?

The fate of the matter is still in the air, and lawmakers are warning that things are likely to remain fluid in the coming weeks as changes are made to both bills to address potential negotiations between the House and Senate over a final to achieve product.

It remains to be decided whether these talks will bear fruit. The differences that have led to any sort of settlement in the past remain largely unresolved, although it is possible that there is a greater sense of urgency due to the COVID-19 pandemic that has weighed on gaming revenue.

For his part, Longbine said he was "very confident" about a deal. He noted that the stakeholders had had conversations over the past few months that he found productive.

"Hopefully it will pass the Senate this year and we'll let the House do what they want to do," he said.

Kelly's office seems to be more of a wait and see based on what kind of end product will come out of the legislature, but it has long encouraged a deal on sports betting.

"Other states keep doing this and I would really hate it if Kansas were left behind." The governor said in 2019.

But Barker took a tougher line and said he would be fine if he didn't believe the terms were right.

"If it's not a good plan for the state of Kansas, I don't care if we do," he said.