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Kansas Sports Betting Hearing Underscores Competing Interests

Kansas Sports Betting Hearing Underscores Competing Interests article feature image

Scott Winters/Icon Sportswire via Getty Images. Pictured: University of Kansas flags.

Potential Kansas sports betting stakeholders presented neutral or opposing testimony at a hearing Thursday, not because they opposed legal wagering but because a Senate bill would prohibit them from taking bets.

Officials representing the state’s lottery retailers and horse racing tracks asked to be included in the Senate’s sports betting bill, which as drafted would only permit commercial and Native American casinos to take bets. The Senate Federal and State Affairs Committee hasn’t voted on the bill, but Thursday’s hearing underscored the complex licensing allocation process lawmakers will need to agree upon before legal wagering can begin in Kansas.

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Lottery Retailers Seek Sports Betting Access

The Kansas Lottery oversees the state’s four commercial casinos, which would be able to accept retail and online sportsbooks under the Senate proposal. Lottery retailers should also be able to take bets, their officials testified Thursday.

Becky Schwartz, associate executive director of convenience store advocacy group Fuel True – Independent Energy and Convenience, said her organization opposed the Senate proposal as long as it excludes the state’s more than 1,100 convenience retailers from taking bets. She asked the Senate to instead endorse a House bill that would expand gaming to convenience stores.

The House proposal would likely anger would-be sportsbook operators permitted in the Senate bill. Though the state lottery oversees both ticket sales and brick-and-mortar casinos, an expanded lottery presence at convenience stores could cut into sportsbook operators’ market share.

Representatives from Penn National, which operates the Hollywood Casino at Kansas Speedway in Kansas City, testified in favor of the Senate’s bill at a separate hearing Wednesday. Other sportsbooks such as PointsBet already have deals in place with commercial casinos should Kansas legalize online and retail sports betting.

The expanded retail betting options could also be less politically acceptable to Republicans, which have supermajority control over both the House and Senate.

Horse Tracks Seek Sports Betting Rebirth

The 2007 act that allowed the Lottery to create four commercial casinos also permitted slot machines at horse tracks. However, the 40 percent slot revenue tax, nearly twice the casino rate, made the machines unprofitable. This, combined with the national demise in pari-mutuel horse wagering, has shut the tracks down for more than a decade.

Horse track stakeholders see sports betting (along with lower slot taxes) as a way to re-open the tracks.

Ruffin Companies lobbyist Jason Watkins said the lower tax rates and expanded gaming options could generate hundreds of new jobs and millions in state revenues if the horse tracks reopen. The vast majority would come from slots: the Senate bill projects roughly $900 million in annual sports betting handle at maturity and around $5 million in annual tax revenues.

Expanded retail betting options at Ruffin Company’s Kansas horse tracks may be more palatable to sportsbook operators than hundreds of in-person retailers, but it could be another stumbling block in the legislation process. Neither the House nor Senate bill would allow sportsbooks at horse tracks.

It remains to be seen if Ruffin Companies owner Phil Ruffin will be able to further influence the legislation.

Ruffin is a former Kansas resident and owner of Las Vegas casinos Treasure Island, Circus Circus and Trump International Hotel and Tower, which he co-owns with former President Donald Trump. He has contributed to state and federal Republican candidates in Kansas and nationwide.

Next Steps for Kansas Sports Betting

John Goodyear, a representative from the League of Kansas Municipalities, said during testimony Thursday it was a matter of when, not if Kansas would have sports betting. The “when” may come down to which stakeholders are allowed to take bets — and how much those same entities can influence legislation.

The House will consider its lottery retailer-friendly sports betting bill at hearings next week. The Senate will take up its bill, and any possible amendments, Feb. 24.

Though pockets of conservative opposition remain, Democratic Gov. Laura Kelly and many pro-business Republicans support legal wagering. Increasing regional competition for Kansas sports betting dollars in Colorado and Iowa — and especially legislation under discussion in Missouri – could also compel Jayhawk State lawmakers to find a solution.

This week’s hearing reiterates that it won’t come without opposition.

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