House passes compromise sports gambling legislation; bill’s fate rests with Senate

TOPEKA — The Kansas House approved a compromise bill Thursday creating opportunities for tribal or state-owned casinos to engage in the business of online and in-person sports betting.

The measure would need to be adopted by the Kansas Senate before forwarded to Gov. Laura Kelly, who has expressed support for sports gaming in the past.

“I’ve got guarantees this will run in the Senate,” said Sen. Robert Olson, an Olathe Republican and lead Senate negotiator on the bill.

Rep. John Barker, R-Abilene, said the bill had bipartisan support and was an outgrowth of about five years of effort. The GOP-led chamber voted 73-49 to affirm the agreement reached by House and Senate negotiators.

Opponents questioned the wisdom of growing an industry that contributed to downfall of an estimated 65,000 problem gamblers in Kansas. They argued the 10% state tax on sports gambling generating $1 million to $5 million in annual revenue was an insufficient incentive to legalize the activity. The four state-affiliated casinos could make $9 million to $45 million annually on sports books.

“Those 65,000 gambling addicts in this state, we’re selling them out. That’s like dropping a bomb on those 65,000 families,” said Rep. Pat Proctor, a Leavenworth Republican who said he’d never bought a lottery ticket. “We have created this monster.”

Rep. Tom Burroughs, a Democrat from Kansas City, said the state didn’t have the right to tell Kansans how or where they spent disposable income.

“We have gambling. We have the lottery. It doesn’t have the ill-fated consequence that many of you think it will bring forward,” Burroughs said.

Rep. Tory Awerkamp, R-St. Marys, said the Legislature should shelve the bill because it was crafted by casino companies or lobbyists. It would be better if the Kansas Lottery operated sports betting because the state would collect profits sought by the casinos, he said.

“It’s not something I think we should grow in Kansas, but if we do lets do it in a way that reflects the best interests of the people,” Awerkamp said.

The bill included a provision funneling 80% of state revenue from legal gambling on sports into a Kansas Department of Commerce fund that could be used to support establishment of a professional sports facility in Kansas. This section of Senate Bill 84 was intended to express support for movement of the Kansas City Chiefs across the state line from Kansas City, Missouri.

The state-owned casinos in Dodge City, Pittsburg, Mulvane and Kansas City, Kansas — established under control of the Kansas Lottery — would be permitted to operate sports books. Tribal casinos would be able to negotiate with state officials to engage in sports wagering.

Negotiators addressed a key obstacle by deleting a provision in the bill that contemplated Wichita businessman Phil Ruffin would compensate owners of Kansas Star Casino in Mulvane if a court determined initiating a system of betting on historic horse races at a Ruffin facility in Sedgwick County violated existing gaming agreements.

Under an earlier version of the sports betting bill, Ruffin would have made a payment of approximately $70 million to Kansas Star Casino to cover violations of existing agreements and Ruffin would be reimbursed through gaming revenues.

Ruffin’s representatives contend the financial arrangement was unnecessary because betting on historic horse races was legal under parimutuel law in Kansas, because these devices weren’t equivalent to slot machines.

Other states offering this form of horse-race gambling rely on video of thousands of past races to enable gamblers to place bets on the outcome.

Under the pending legislation, the Kansas Lottery and the Kansas Racing and Gaming Commission would share oversight of sports wagering. Each casino could operate up to three online sports wagering platforms. Betters on the casinos’ platforms would have to be physically located in Kansas to submit a wager.

The casinos could enter marketing agreements with professional sports franchises, including placement of kiosks at a team’s facility to allow fans to place bets. The casinos could enter marketing agreements with 50 businesses and entities, with one-fifth of the total reserved for nonprofit organizations. Sports gamblers involved in state-sanctioned betting would have to be 21 years old.

The bill would enable federally recognized Native American tribes to submit a request to the Kansas governor and Kansas Lottery director to operate a sports book “under the substantially same terms and conditions” applied to the state’s four casinos.