Kansans could be able to bet on the Chiefs, Jayhawks. Here's what you need to know.

Andrew Bahl
Topeka Capital-Journal
Some online platforms such as FanDuel have been advertising for weeks in anticipation of the approvals by Michigan regulators, giving launch authorization for legal online gambling and online sports betting.

Fans of the Kansas City Chiefs were not the only people in Kansas who would have been let down by Sunday's Super Bowl.

Sports bettors were likely disappointed, as well, as legislative gridlock in recent years has blocked the state from allowing wagers on live sporting events, an activity nearly 20 states have legalized since 2018.

But lawmakers are ready to start anew, with hopes that the desire for new revenue streams, as well as a demand from sports-hungry residents, will finally be the push needed to get some form of sports betting into place.

The Kansas Lottery has estimated as much as $600 million in bets could be placed annually, and casinos are optimistic about the potential for growth going forward.

"We believe legal sports betting has the potential to provide a meaningful shot in the arm to Kansas’s gaming industry and to provide a new revenue stream to the state of Kansas,” said Jeff Morris, a lobbyist with Penn National Gaming, who runs Hollywood Casino at Kansas Speedway in Wyandotte County.

But stark differences remain between competing proposals in the House and Senate, reopening similar debates from years past and setting the stage for some high-stakes dealing. 

"All the interested parties have continued discussions, they've continued to try to find common ground," said Sen. Jeff Longbine, R-Emporia. "I'm confident that, in a lot of areas, they have found that."

Why is Kansas looking at legalizing sports betting?

The days of having to road trip to Las Vegas to bet on live sporting events are long over, thanks to a 2018 U.S. Supreme Court ruling allowing sports betting nationwide. 

Currently, 19 states have legalized sports betting, with voters in Maryland, Louisiana and South Dakota approving ballot initiatives in November to join the list in the coming months.

But a minority of bettors actually drive to a casino to place their bets at a physical sportsbook. Most use mobile applications to allow sports fans to wager from their couch, with Penn National estimating that nearly 70% of betting takes place from mobile devices.

Proponents argue that sports betting is already happening in the state, just on the black market via offshore gambling firms. Legalizing the practice could increase regulation, they argue, while also providing more resources for those addicted to gambling.

How much money could sports wagering make for Kansas?

And there is also plenty of money at stake, although not as much as other forms of gaming currently bring into the state's coffers.

It is estimated that 95% of the proceeds from wagers on sporting events are returned to bettors, much higher than for slots or table games. That leaves a smaller opportunity for revenue, both for the casino and tax collectors.

But depending on how the legislation is written, sports betting could rake in upwards of $3.5 million a year for the state, the Kansas Lottery estimated, although the agency noted that could grow as the option becomes better established.

Legislation in each chamber would kick in money for the state's problem gambling fund, which helps provide money for addiction treatment.  It also would provide money for a new unit within the attorney general's office to investigate gaming-related crimes.

A key difference between what is being proposed in the Senate and the House versions of the bill is exactly how big a slice of the pie would be left to the state.

The Senate bill would mean a cut to the state of either 7.5% or 10% of all revenues, depending on if bets were placed online or at a physical sportsbook. In the House bill, that percentage is higher, with the state getting 14% or 22%, respectively.

Barker said it was essential to ensure the state earned a fair cut, something he didn't believe the Senate bill did.

"It was written by the casinos, in my opinion," he said. "It is all about the casinos. We took a different approach."

But Morris, the Penn National executive, argued that it was important that taxes in Kansas fall into line with what other states in the region were doing. 

In reality, the tax rate varies widely among states nearby. Iowa has a 6.5% rate, while Arkansas' is more than twice that. Colorado falls somewhere in between, at 10%.

Rep. John Barker, R-Abilene, is a proponent of allowing convenience stores to participate in a potential sports betting program in Kansas.

How would the process work?

The other main sticking point, historically, has been the actual design of the program, with major ramifications for Kansans interested in making bets.

The Senate bill gives much more power to the casinos, with the Kansas Lottery authorized to negotiate sports betting deals with each of the state's four gaming facilities. 

The casinos would then, in effect, run the programs, with oversight by the lottery. Each facility could partner with up to two sportsbook companies for administrative purposes.

Casinos argue this would help the state, as it would bring in more licensing and tax revenues, while not compromising the integrity of operations. The state's four federally recognized tribes would be able to negotiate compacts directly with the governor.

But Barker and his counterparts in the House have favored a different method, one which they believe spreads the wealth around. 

Under the House proposal, convenience stores or retailers who sell lottery tickets could also participate in sports betting, by offering simple wagers on the outcome of games.

More complex, "in-game" betting — such as how many touchdowns the Kansas City Chiefs will score in the second half of a game — would still be in the purview of casinos, which Barker said still "have an advantage" under the model.

He added that giving local retailers a shot at being involved in sports betting was good for the entire state, outside just the counties which already have casinos.

"While they're at a convenience store they might buy gas, they might buy some bread or milk," Barker said. "And that helps the local economy. The casinos want it all controlled by them."

But Longbine said that running sports betting directly through the Kansas Lottery would make the state responsible if losses in a given year outweigh the profits.

He also argued that because the lottery is charged with overseeing gaming, it would, in effect, be trying to maximize profit from a program it also oversees.

"It is hard to regulate yourself," he said.

There are other details as well. Some, including Gov. Laura Kelly, want a simultaneous expansion of the lottery program to include virtual tickets, arguing a modernization is needed to ensure it remains competitive with expanded gaming. That would be allowed under the Senate bill.

And both Sporting Kansas City and the Kansas Speedway are pushing for provisions that allow them to offer betting directly at their facilities, with the aid of a sportsbook company. Such arrangements are common in other states and the teams argue they help ensure fans will want to fill the stands.

Will sports betting actually pass?

The issue's fate is still very much up in the air, and legislators caution that things will likely continue to be fluid in the weeks to come, as amendments are tacked onto both bills with an eye towards eventual negotiations between the House and Senate on a final product.

Whether those talks will bear fruit is still to be determined. The differences which have derailed any sort of agreement in the past remain largely unresolved, although it is possible that there is a greater sense of urgency because of the COVID-19 pandemic, which has dented gaming revenues.

For his part, Longbine said he was "very confident" of a deal. He noted that stakeholders had been in talks in recent months that he felt had been productive.

"Hopefully it'll pass the Senate this year, and we'll let the House do what they want to do," he said.

Kelly's office appears to be taking more of a wait-and-see approach based on what type of final product emerges from the legislature but she has long encouraged a deal on sports betting.

"Other states are moving ahead with that and I would really hate for Kansas to be left behind.” the governor said in 2019.

But Barker took a harder line, saying he would be comfortable walking away from the issue altogether if he didn't believe the terms were right.

"If it is not a good plan for the state of Kansas, then I don't care if we do it," he said.