Kansas Sports Betting Preparing For Launch

On May 12, Governor Laura Kelly signed SB84 to legalize sports betting in Kansas. The US state is the second to do so this year, after a Maine bill was signed on May 2. By signing the bill, Kansas has overtaken Missouri in the so-called “Border War”, with the Show-Me State failing to take legal action towards sports wagering.

Having first been introduced in 2020, SB84 will become law on July 1, 2022. SB84 dictates that the Kansas Lottery must create a new regulatory environment for sports betting no later than January 1, 2023. However, officials from Kansas’ four state-owned casinos are rushing to launch sports wagering facilities ahead of the upcoming football season.

Just days after the bill’s signing, Boot Hill Casino & Resort announced its first two sportsbook partnerships with DraftKings and Bally Bet. Each of the four casinos can distribute three sportsbook licenses, and Boot Hill is the first (and so far the only) to do so.

History of Betting in Kansas

Since the overturning of PASPA in 2018, more than thirty states have legalized sports wagering. While it may seem like Kansas is slow to catch on to its benefits, the wheels have been in motion for longer than its recent legalization would suggest. 

Horse and dog racing and pari-mutuel wagering have been legal in the state since 1986 when voters permitted the state to “permit, regulate, license and tax” wagers under the Kansas Parimutuel Racing Act. The Kansas Racing and Gaming Commission was created the following year.

Jump to 2007, and the Kansas Expanded Lottery Act was proposed to allow a state-operated “destination casino resort” in the northeast, southeast, south-central, and southwest of Kansas. In addition, each of the state’s pari-mutuel tracks was permitted to install slot machines. 

Boot Hill, the first of the four casinos, opened in 2009. Kansas Crossing Casino was the fourth and final facility to open in 2017. While legalizing and opening its four state-owned casinos took an entire decade, the Sunflower State has managed to introduce legal sports wagering in a fifth of the time.

Efforts to legalize sports betting were first introduced in 2020, with SB84 put before the Senate on January 26, 2022. On April 28, the Senate voted 21-13, and the House voted 73-49 to pass the bill, and on May 12, Gov. Laura Kelly signed the bill into law.

Sports Betting Legislation

SB84 dictates that the Kansas Lottery must create a new regulatory environment for sports betting no later than January 1, 2023. As part of the bill, the state’s four casinos can partner with three sportsbooks, meaning Kansas could potentially see up to twelve retail and online wagering platforms launched in the near future. 

Alongside sports betting, the bill will allow up to 50 “marketing entities” to offer retail wagering kiosks. These establishments may include bars, restaurants, and other businesses. 

A further clause of the new law will legalize historical horse racing, despite the widespread debate over whether or not it classes as a casino game. If it can be considered pari-mutuel betting, it will come under a different class of gambling that is permittable under the Kansas Expanded Lottery Act.

SB84 does not issue separate tax rates for online and retail sportsbooks. Instead, the state will tax all sportsbook bets at a flat rate of 10%. This is relatively low, especially compared to New York’s 51% and Pennsylvania’s 36%. Of the 35 states where sports wagering is legal, only states like Indiana, Iowa, Michigan, Nevada, and South Dakota offer tax rates below 10%.

While the state will pour 80% of the tax revenue into the “Attracting Professional Sports to Kansas Fund,” just 2% will go towards problem gambling and addiction recovery services. The decision to funnel four-fifths of its sports betting revenue into attracting professional sports teams can be attributed to the NFL’s Kansas City Chiefs. 

As the NFL team considers new stadium options, rumors have recently circulated that the Chiefs would consider moving their base from Missouri to Kansas. While Chiefs President Mark Donovan says that the Chiefs are considering a renovation or replacement possibilities for its current Arrowhead stadium, he acknowledges that the team is also looking at options in Kansas. 

So, it’s not impossible that Kansas could have a professional home team along with its brand new sports wagering market.

Working Towards the Launch

Kansas Lottery officials believe that the launch of sports betting will be a smooth and efficient process. Each casino is already owned by the lottery and regulated by the Kansas Racing and Gaming Commission, which lottery Executive Director Stephen Durrell believes will help ensure a quick rollout. 

Speaking of his hopes for the future unveiling of sports wagering in the state, Durrell emphasized, “we’ll definitely figure out the quickest and most efficient way to get it up and running.”

Hollywood Casino’s VP and General Manager Rick Skinner has acknowledged that he wants sports wagering to begin at the casino as soon as possible, even by setting up temporary facilities. “Our objective is to get this open before football season,” Skinner claimed, “so people right at the beginning of the season can come in and put their bets on the Chiefs to win.”

Sportsbook Partnerships

Each of the four Kansas casinos has three sports wagering licenses to offer to sportsbooks through an official partnership. The bill allows each casino to capitalize on a fourth license if they partner with a professional sports team. However, with only one professional sports team in the state, Sporting KC of the MLS, it may be a struggle to fill these licenses.

Boot Hill Casino & Resort has already announced two of its official online sportsbook partnerships. DraftKings and Bally Bet are the first sportsbook announcements since SB84 was signed into law. A retail DraftKings sportsbook will also open in the casino.

Butler National Corporation is the subsidiary that manages Boot Hill Casino & Resort. Of Boot Hill’s first two sportsbook partnerships, Butler National CEO Clarke Stewart said: “We worked diligently to find partners that would bring Kansans a seamless, safe and premium sports betting experience”.

Kansas’ other state-owned casinos are Kansas Crossing Casino (managed by JNB Gaming), Kansas Star Casino (Boyd Gaming), and the Hollywood Casino (Penn National Gaming). 

When SB84 was first introduced in 2020, Kansas Crossing Casino announced a primary agreement with PointsBet to open a sportsbook on the premises, providing that sports betting legislation was passed. Since the bill passed last week, Kansas Crossing has not provided any further confirmation upholding this agreement.

Though Hollywood Casino has not yet commented on any potential partnerships, Penn National Gaming’s Barstool Sportsbook platform will likely receive one of its three licenses. 

Kansas Star has not welcomed the legislation as much as the other state-owned casinos. Merely hours after the bill had passed, Kansas Star Casino filed a lawsuit against the state. By legalizing historical horse racing at the Wichita Greyhound Park, Kansas Star argues that the Kansas Lottery has breached its contract with the casino.

In the contract, the lottery agreed not to permit competition from other facilities in the Wichita area (where Kansas Star is based). While Boyd Gaming has supported legislation to legalize sports betting, the company seeks $25 million in penalty fees for the lottery’s alleged breach of contract. Meanwhile, it’s expected that FanDuel will receive one of Boyd Gaming’s three sportsbook licenses.

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