Kansas Regulates Sports Betting: SB84 Signed by Governor

With the signature of Governor Laura Kelly (D) on May 12, 2022, sports betting legislation SB84 became law in Kansas. The governor's approval follows votes in the State Senate of 21 – 13 and the House of Representatives 73 – 49 in favor of the measure.

This piece of legislation allows sportsbooks to operate at commercial and tribal casinos within the state, at up to 50 separate retail locations, and online. Licensed Kansas sports betting is expected to appear by January 2023 and possibly as soon as fall 2022. However, fans of other online amusements, like casinos and online poker sites, will be disappointed to note that SB84 does not call for any other types of online wagering besides betting on sports.

Details of SB84

Unusually for this kind of bill, SB84 puts sports betting under the dual direction of both the Kansas State Lottery and the Kansas Racing and Gaming Commission. This mirrors the way commercial casinos already operate in the state with the Lottery technically owning the gaming endeavors, which are run in conjunction with operators (known as “lottery gaming facility managers”) like Penn National, and the system as a whole is regulated by the KRGC.

Each commercial casino in Kansas – of which there are four – will be able to host a sportsbook at its B&M facilities. In addition, they will be able to partner with online gaming companies to each provide up to three “skins” for sports betting over the internet. Each firm that intends to offer its services for this purpose will have to obtain a license from the KRGC.

Each casino will also be able to enter into up to 50 marketing partnerships, which would allow them to receive bets placed on kiosks or other infrastructure at retail locations. At least 20% of these marketing partnerships must be with “nonprofit fraternal or veterans organizations.”

Kansas gaming tribes will also be permitted to offer onsite and online sports betting for USA residents. However, in order to do so, they will have to request renegotiation of the relevant tribal compact. There are currently four tribal casinos in Kansas operating under compacts negotiated between the state and Indian tribes.

All bettors have to be at least 21 years old, and for mobile betting, they must be physically located within Kansas borders at the time their wagers are placed. Wagering on college sports is allowed, and, perhaps surprisingly, this includes Kansas collegiate teams.

Money Matters

The introduction of legalized sports betting in states across the Union increases the personal freedom of their inhabitants, but this isn't the only reason why sportsbook regulation laws are being passed. There's plenty of money to be made also, and the states certainly want their cut. Kansas is no exception.

Still, state leaders in Topeka have restrained their greed and have agreed to a tax of 10% of sports betting revenue. This is a very reasonable rate, about halfway between Nevada's 6.75% tax and New Jersey's 14.25%, and much lower than the 36% charged in Pennsylvania or the 20% rate effective in Nebraska.

Each year, the first $750,000 of revenue raised for the state from sports betting will go toward the White Collar Crime Fund. This money will be used to investigate and prosecute crimes related to sports betting in Kansas.

Of the remaining cash, 80% will be dedicated to the Attracting Professional Sports to Kansas Fund. This money will be used to attempt to lure pro sports teams to Kansas and can include the construction, rehabilitation, and expansion of stadiums or other athletic facilities. Many have concluded that the primary target of this fund in the NFL Kansas City Chiefs, which despite their name, are actually based in Kansas City, Missouri, on the border between the two states.

Another 2% will go toward the Problem Gambling and Addictions Grant Fund. In addition, the amount pledged to this fund by the state each year, regardless of sports betting revenue, is increased from $80,0000 to $100,000.

Legal Troubles Afoot?

There's a chance that SB84 might be derailed by legal processes. Part of the bill has nothing to do with sports betting but rather will allow historical horse racing machines at Wichita Greyhound Park. Historical horse racing is like slots, but the results of each “spin” are dependent upon the outcome of a past horse race, which proponents argue makes this a type of parimutuel wagering.

The Kansas Star Casino in Mulvane disagrees with this line of reasoning. It claims that historical horse racing is a form of casino gaming, not parimutuel wagering, and is against the contract between the casino and the state. Kansas Star Casino seeks a $25 million penalty.

However, this legal proceeding involves a side-issue that isn't really impacted by the sports betting provisions of SB84. We expect it to have no noticeable effect on the establishment of regulated Kansas sports betting.

Sports Betting Timeline

SB84 becomes the law of the land on July 1, 2022. Yet, sportsbooks will not therefore be able to immediately open their doors. There are several procedural steps that must occur first.

The Kansas Lottery has until Aug. 1, 2022 to come up with a process for background investigations for internet sportsbook platforms. These background checks must commence no later than Aug. 15. Then by Sept. 1, the Lottery must decide how it will receive and approval license requests for online sports wagering platforms.

On or before Jan. 1, 2023, the KRGC must enact “permanent rules and regulations” governing the sports betting industry; however, temporary rules can be adopted before then, subject to the approval of the attorney general.

Because of the key dates stipulated in legislation, few expect sports betting to get underway before Oct. 1, given that the licensing process may not be in place before Sept. 1, and it will take some time to actually approve the applications. Yet, most observers feel that the relevant actors will be ready to go well before the Jan. 1 deadline for setting up regulations. This leaves the fourth quarter of 2022 as the most likely period for the introduction of licensed Kansas sports betting.

Reactions

SB84 had broad bipartisan support, indicating that Kansans of all political stripes approved of it. In a statement released after the signing of the bill, Governor Laura Kelly said:

Legalizing sports betting will bring more revenue to our state and grow our economy. This is another mechanism that casinos, restaurants, and other entertainment venues can now utilize to attract Kansans to their establishments.

Kansas Governor Laura Kelly

State Senator Rob Olson (R) was the one who originally introduced SB84 in the legislature back in March. He commented:

I was excited to pass sports wagering in Kansas, it’s something that Kansans are already doing, and it will bring additional tax revenue to our state to help with our needs. My constituents have pushed for this legislation for years, and now, the next time we have a significant sporting event in our state, Kansans will be able to bet on their hometown team.

However, not everyone was onboard with the idea of another form of gambling coming to the Sunflower State. State Senator Virgil Peck (R) made reference to a 1986 episode of “The Twilight Zone” in which a couple is offered $200,000 to press a button that will kill an anonymous stranger. Peck said, “Someone we do not know, their life will be destroyed if we pass this legislation.”

Revenue Projections

Unlike with the first states to contemplate legalized sports betting, those envisioning Kansas sportsbooks appear to have most realistic and sober estimates as to the amount of money that will be generated.

Under an earlier version of the bill that contemplated a tax rate of 20%, projections showed that the state could collect $1.8 million in 2023, $6 million in 2024, and $10 million in 2025. However, the actual tax rate of 10% implies $900,000 in 2023 growing to $5 million in 2025. This is in line with figures published in the Kansas Reflector, which estimates between $9 million and $45 million in annual sportsbook revenue, which would lead to tax receipts of between $900,000 and $4.5 million per year.

Some foresee Kansas exceeding this level of sports betting revenue given the ability to attract bettors from neighboring states. Missouri, Oklahoma, and Nebraska do not have any state-regulated sports betting, so their residents might be tempted to cross the border and partake of the offerings that will soon be available in Kansas. Colorado is the only neighboring state with licensed sportsbooks, its voters having passed the required ballot measure in November 2019.

Sports Betting Possible Today

If you're looking forward to the appearance of Kansas sportsbooks, then we're here to inform you that you don't have to wait. Though it will likely take six or more months for the first KS-regulated sports betting services to appear, there are already bookmakers ready to accept your action online.

These enterprises are located offshore, far from the meddlesome reach of federal and state law enforcement. And rest assured, it's perfectly legal for you to frequent these websites as an ordinary bettor – all the laws that target these firms are directed at those who own and manage the sites, not regular people who place bets now and again.

For detailed information, consult our list of the best U.S.A. sportsbooks on the internet. If poker is what you really want to play, then we have prepared a rundown of the leading Kansas online poker sites. For those who live elsewhere in the United States, our guide to online poker in the U.S.A. may prove a worthwhile read.