TOPEKA — The senator chairing the Kansas Legislature's committee exploring legalization of sports gambling in the state wagered that industry insiders working behind closed doors could work out an agreement on a bill before the start of the 2019 session in January.
Sen. Bud Estes, a Dodge City Republican leading the joint House-Senate committee looking into sports betting, said casino managers, industry lobbyists and consultants, lottery ticket retailers, sports league representatives, state regulators as well as a few legislators ought to informally collaborate on a plan to define a framework for legal gambling on sports in Kansas.
"Get your heads together," Estes said at the close of a committee hearing Tuesday at the Capitol. "We have a chance to get it right. I just think there's a workable solution sitting here."
The senator suggested a handful of legislators on the House-Senate committee could attend the National Council of Legislators from Gaming States meeting Jan. 4-6 at Harrah's casino in New Orleans. Spectrum Gaming Group, a consulting firm specializing in legalized gambling services, might offer scholarships to lawmakers for the Louisiana conference.
Rep. John Carmichael, a Wichita Democrat on the committee, said the insider bill-writing strategy recommended by Estes lacked transparency necessary when wading into a market dominated by illegal gamblers.
"I don't think that is a good idea," Carmichael said.
The U.S. Supreme Court in May struck down a 1992 federal ban on sports wagering in most states and opened the door for states like Kansas to become players in the industry.
The 2018 Legislature briefly explored gaming legislation but deferred the issue for a year.
Unresolved is whether Kansas ought to limit sports betting to the state-owned Boot Hill Casino in Dodge City, Kansas Crossing Casino in Pittsburg, Hollywood Casino in Kansas City, Kan., and Kansas Star Casino in Mulvane. Another option would be to allow Kansas Lottery retailers to take sports bets. Perhaps the state's defunct dog racing tracks could handle the book if reopened. Or, bars and taverns could get a piece of the action.
In addition, the ad-hoc group would determine whether Kansas allowed online sports gambling or use of mobile apps for betting by cellular telephones. The legislative proposal would need to address the level of taxes levied and create the necessary regulatory landscape.
Ohio state Sen. Bill Coley, a Republican who chairs the Ohio Senate's government oversight committee, told Kansas lawmakers other issues to be faced included creation of systems to deter money laundering, match fixing, problem gambling and to figure out what sports would be included in the Kansas model. Should bets be limited to game outcomes or include in-play wagers such as first team to score, completion of the next pass or the whether the next shot goes in the hoop?
"What if developers wish to make a substantial investment in a large resort facility in your state?" Coley said. "Would you permit those developers to have a sports book at this large resort complex?"
Coley said states that countered illegal gambling by creating legal betting opportunities could help sports leagues.
"If the states get this wrong," he said, "the biggest losers will be the sports leagues. No longer will their matches be viewed as athletic contests. Everything will start to look like professional wrestling. Entertaining, but not true competition."
Kevin Fowler, a Topeka attorney representing Kansas casinos in Pittsburg, Dodge City and Mulvane, recommended the legislative committee place sports wagering under exclusive control of the Kansas Lottery and the Kansas Racing and Gaming Commission. He said that would hand betting on sports to the four state-owned casinos.
"Sports wagering may enhance tourism as an attractive amenity at the state's casinos within a reasonable regulatory framework," Fowler said.
Troy Stremming, who represents the company managing Kansas Speedway Casino in Kansas City, Kan., said the sports betting industry was incorrectly viewed by some as a "cash cow" for casinos. He said legal sports betting was a low-margin business and wouldn't be viable unless limited to bricks-and-mortar casinos or pari-mutuel tracks.
He recommended Kansas match the Nevada tax rate of 6.75 percent of sports wager revenues retained after payment of winners.