Kansas Legal Sports Betting Hopes Take First Step with New Bill

Kansas could see up to 12 legal online sports betting options under a bill introduced Tuesday in the state Senate.

The proposal would allow each of the state’s four commercial casinos to open a retail sportsbook at their facilities and partner with up to three online providers each. The state’s Native American gaming tribes could also renegotiate their government compacts to offer sports betting as well.

The Kansas Speedway in Kansas City would also be able to open a designated sports betting area for online wagering but would not be allowed to take in-person wagers. The track is adjacent to the Hollywood Casino, which would be able to take in-person bets under this bill.

This is the first 2021 sports betting bill introduced following several failed efforts to legalize wagering in previous years.

A 2020 proposal seemed well-positioned to pass but was derailed and ultimately killed as lawmakers scrambled to deal with larger issues surrounding the COVID-19 pandemic.

The Kansas Lottery, which operates the state’s four commercial casinos, would have sports betting oversight under the 2021 bill. Some lawmakers pitched Kansas Racing and Gaming Commission oversight in a 2020 proposal, and it remains to be seen whether or not backers will introduce a follow-up bill in 2021.

Oversight divisions are one of many issues elected officials will have to negotiate as the bill begins the long legislative process.

Key Elements of Kansas Sports Betting Bill

Senate Bill 84 would levy a 7.5% tax for in-person sports bets and a 10% rate for online wagers, both below the median rate charged in the roughly two-dozen states with legal wagering.

No initial or annual licensing fees were specifically mentioned in the original bill.

There are no codified collegiate betting prohibitions in the bill, meaning Kansas bettors could wager on popular out-of-state and in-state college programs such as the University of Kansas and Kansas State University men’s basketball teams. However, the bill would allow regulators to limit offerings under its discretion.

Like in every other state with legal wagering, officials would have to promulgate and finalize follow-up rules before wagering begins. The law requires regulators to complete that process on or before Oct. 31, 2021.

Bettors would need to be at least 21 years old to place a mobile bet and be physically located within state lines.

There was no language regarding an in-person sign-up, meaning eligible bettors could register, deposit and wager from anywhere in the state.

The legislation would also create a voluntary sports betting self-exclusion list.

Potential Kansas Sportsbook Partners

It's far too early to tell which sportsbooks would enter the hypothetical Kansas market, but existing affiliations and deals with the four commercial casinos form natural partnerships. Though the Lottery oversees the properties, each of the four is managed by an independent, third-party company:

• Hollywood Casino at Kansas Speedway (Kansas City): Penn National operates the casino part of the race track complex and would almost assuredly use one of its three skins for its Barstool Sportsbook.
• Kansas Crossing Casino and Hotel (Pittsburg): The casino's operating company struck a deal last year with PointsBet giving it exclusive rights to its primary skin should sports betting be legalized in the state.
• Kansas Star Casino (Sumner):  Boyd Gaming, which has a sports betting partnership with FanDuel, runs the casino. It could also potentially use a skin for its own BConnected sportsbook brand.
• Boot Hill Casino (Dodge City): The Dodge City casino is the lone gaming property for Butler National, a technology and engineering conglomerate. It has no existing deals with sports betting partners.

Assuming all four commercial casinos operate three skins each, that could let Kansas attract other top brands national brands such as DraftKings, BetMGM and William Hill.

However, the 12 total skins would be roughly a third of the total in New Jersey — the national leader in average monthly handle — or neighboring Colorado and could still shut out some other top sports betting brands.

The 2021 sports betting bill builds off existing law that allows federally recognized Kansas Native American tribes to offer the same types of games as the commercial casinos. It remains to be seen how many Kansas tribes would open retail sportsbooks and if that would extend to online options as well.

Next Steps for Kansas Sports Betting

The bill was introduced by the Senate Committee on Federal and State Affairs, which now has jurisdiction over the bill. The committee is not scheduled to discuss the proposal this week but could do so as early as next month.

Should the bill pass the initial committee, it would likely have to go through further committees and then a vote before the full Senate floor.

Should the Senate pass the bill, the House would also have to agree to an identical version, which would then be sent to Gov. Laura Kelly for her signature to pass into law.

Kelly, a Democrat, has largely supported legal sports betting, but any legislation would have to pass through the Republican-held legislature where the GOP have supermajorities in both chambers.

Conservative and anti-gambling sentiment in other states’ Republican-led legislatures such as Kentucky’s have tanked sports betting bills despite bipartisan support.

Additionally, elected officials must reach consensus on key sports betting issues such as regulatory oversight, tax rate and licensing eligibility.

Missouri’s action on sports betting could compel Kansas to follow suit, but the Show Me State has struggled to build political consensus as it considers a half-dozen proposals as well as competing interests between backers of its casino and video gaming terminal stakeholders.

Missouri has also suspended part of its 2021 session due to the pandemic, and the threat of future closures looms in statehouses nationwide.

In the meantime, Kansas’ first 2021 sports betting step is the latest in what has already been a frenetic year for legal wagering in the region.

Colorado has emerged as one of the nation’s highest-grossing sports betting markets, and Nebraska is set to approve its first-ever commercial casinos — and potential sportsbooks — in the coming months.

Kansas’ 2021 sports betting efforts are at their earliest stages, but it has now joined more than a dozen states seriously considering legalization this year.