‘Border War’ Rivalry Helps Fast-Track Legal Sports Betting in Kansas, Missouri

The border state rivalry between Kansas and Missouri is pushing lawmakers in each state to legalize sports betting faster than the other.

"Kansas legislators are very cognizant of the competition between our states, and I do think that this urgency is a driving factor in our work to approve sports wagering in our legislature," Kansas Rep. Stephanie Clayton (D) told Action Network. She remarked during a bill hearing that she doesn't like Missouri and "wants to beat them."

Their college basketball teams are already part of an historic rivalry, now their sports betting legislation is the farthest along its been thanks to the pressure they've put on each other. Both state's Houses of Representatives have approved their bills, which are just final Senate votes away from heading to their governors to sign.

The Kansas legislature is adjourned for now, though Senate and House leadership have formally agreed on a bill.

Kansas University's national championship run actually prevented votes before a two week recess. So many lawmakers traveled to New Orleans for the Final Four that there weren't enough in Topeka to hold a vote.

“How close Kansas isdefinitely helps the effort in Missouri andhelps with getting the senators on board,” Missouri Rep. Dan Houx (R), sponsor of his state's bill, told Action Network. “Missouri and Kansas have been at a border war for a long time and we’d certainly love to get ahead on grabbing extra tax revenue.”

The Kansas Senate will reconvene for one day on April 25 for a final vote. Missouri's Senate has until May 13 to pass its bill, but it could get done before then.

According to Houx, Kansas may beat his state on a technicality: signed laws take effect in June in Kansas. In Missouri, they take effect in August.

“I think the next step is you'll see both states fighting to launch first," said John Pappas, a lobbyist for iDEA Growth, which advocates for legal sports betting across the United States.

'Haven't Seen Anything Like This'

Lawmakers often refer to the legal betting landscape around their states and the revenue they're losing out on when considering a bill.

Those arguments helped legalize online sports betting in New York, which missed out on revenue to New Jersey for years. It's a chief selling point for lawmakers pushing legislation in Minnesota and Massachusetts, which are surrounded by legal betting states.

But two neighboring states, at the same point in their legal process, competing to beat the other and talking about it? That's unheard of, Pappas said.

"I haven’t seen anything like this," Pappas said. "You hear states reference states near them that have already legalized but it is rare that they’re happening on parallel tracks."

Shaping Each Other's Laws

What's in each bill is impacting both states, just as much timing.

Both of each state's bills would tax sports betting at a low rate (10% in Kansas, 8% in Missouri).

The senate's pushed for a higher rate in Missouri and Houx said the final rate will probably end up somewhere between 8 and 21%.

In Kansas, House leadership fought to keep its rate low. Its Senate had also proposed a 20% rate but agreed to come down to compete with other states.

Both states have the potential for ultra-competitive markets as each bill makes more than 35 skins available for licensees.

Casinos would be the main license holders in both states, with language in both bills setting them up for three skins per venue. So you'd expect to see all the major sportsbooks in both states, partnering with those casinos.

War for NFL Team?

In a sudden twist, Kansas lawmakers amended their bill just before the House vote to direct 80% of tax revenue to pay for a new stadium.

The Kansas City Chiefs are reportedly considering relocating from Arrowhead Stadium in Missouri.

Kansas sports betting wouldn't come to close to the billion dollar pice tag of a new NFL stadium, but its developers have been in talks to acquire the Chiefs nevertheless.

Moving the Chiefs to Kansas would be one of the happiest days of her life, said Clayton.

Missouri doesn't want to lose the Chiefs either, though.

A clause in their bill, which is backed by the team along with five other professional sports franchises, would reserve sports betting licenses for pro sports teams.