Kansas Gov. signs sports betting into law; Hollywood Casino unveils sportsbook details while Boyd sues state

It’s official: Kansas Gov. Laura Kelly has now signed a bill legalizing sports betting into law. Senate Bill 84 was first signed off by legislators in the Sunflower State and sent to Kelly's desk in late April. Her approval now means Kansas residents will soon be allowed to legally bet on sports teams - although a casino has now sued the state, immediately after approval, over a provision in the new law that also legalizes historical horse racing.

“Legalizing sports betting will bring more revenue to our state and grow our economy,” Kelly said in a statement yesterday, according to KSHB. “This is another mechanism that casinos, restaurants and other entertainment venues can now utilize to attract Kansans to their establishments.”

The law calls for a 10% tax on each bet, with estimates of about $41 million in revenue for the state over the next five years. A total of 80% is earmarked for a Kansas Department of Commerce fund to provide incentives for pro sports teams to come to the state, including the NFL’s Kansas City Chiefs from Missouri.

Lawmakers finally managed to pass sports gaming in the state after years of failed attempts through legislation that allows both mobile -each casino could operate up to three online platforms- and retail betting at casinos, and up to 50 other locations chosen by casinos. Gaming facilities could enter agreements with pro sports franchises to place kiosks at a team’s venue as part of the 50 total businesses and entities they are allowed to partner with.

State-owned casinos in Dodge City, Pittsburg, Mulvane and Kansas City, Kansas, which are established under the control of the Kansas Lottery, would all be permitted to operate sportsbooks. Recognized Native American tribes are also able to submit a request to the Kansas Gov. and Kansas Lottery director to operate a sportsbook “under the substantially same terms and conditions” applied to the state’s four casinos.

Under the new law, the state lottery and the Kansas Racing and Gaming Commission will share oversight of the new market. Earlier this week, lottery officials told local media that Kansas Lottery staff is already working with its casino partners to get the market up and operating “as quickly as we can.” 

But the new law has already led to a lawsuit, almost immediately after signature, by the operator of a state-owned casino over an unrelated part of the law designed to revive a long-closed greyhound track in its area, reports Associated Press.

The lawsuit was filed by the Kansas Star Casino in Shawnee County District Court in the state capital of Topeka. The casino is about 15 miles south of Wichita and operated by Las Vegas-based Boyd Gaming under a contract with the Kansas Lottery that runs until December 2026.

The casino operator argues that the state is breaching its contract, which says the lottery will not permit competition from similar facilities within the Wichita area. The dispute is over a provision allowing new gambling devices at Wichita Greyhound Park, a dog park that first opened in 1989 and closed in 2007 amid financial troubles. 

The devices in dispute are historic horse racing machines, with the new law allowing 1,000 of them at the dog park. Boyd argues HHRs -which replay snippets of past horse races, with results determining what a bettor wins- are “indistinguishable” from slot machines, and says the state isn’t allowed to let the Wichita Greyhound Park have them.

“Boyd has lived up to its obligations, successfully operated the Kansas Star and invested hundreds of millions of dollars in Kansas Star based on the State’s contractual promise,” the company said in a statement, retrieved by AP.

The now closed Wichita Greyhound Park

The lawsuit named the state, the lottery and the Kansas Racing and Gaming Commission as defendants, and Boyd is seeking a $25 million penalty specified by the contract, plus interest. It is expected a Kansas Supreme Court’s ruling will determine whether HHRs are the same as slots or a different form of gambling.

Ruffin Companies, which owns the Wichita Greyhound Park, believes the placement of HHRs is not only legal but also a much-needed opportunity to revive the venue. In a statement, the business has responded to Boyd and harshly criticized their decision to sue.

“We are disappointed but unfortunately not surprised that Boyd Gaming, the manager of the state-owned and operated casino in Sumner County, filed a lawsuit against the state of Kansas," the text reads. "This action fits a longstanding pattern of litigation threats against elected officials and Kansas taxpayers."

The company argues that the Kansas legislature is the one with the control to define and regulate pari-mutuel wagering, and that it has identified -similarly to how other states have done- "key differences between slot machines and historic horse racing machines," classifying HHRMs in the statute as parimutuel.

"Parimutuel wagering has existed in this state long before the creation of state-owned and operated casinos," the text further reads. "The operation of statutorily parimutuel wagering can in no way be an expansion of gaming or in any way a breach of contract with a casino manager."

Meanwhile, state Rep. John Barker, an Abilene Republican who helped draft the final version of the law, remarked this is a separate part of the bill, so he said “maybe the sports betting could go forward.” This is good news for sports bettors in the state, but also for casinos, which have begun unveiling their plans for once the market opens.

Penn National Gaming, which operates the Hollywood Casino at Kansas Speedway in Kansas City, said it plans to launch mobile sports betting and to have a retail sportsbook at the venue ideally on the first day it becomes legal to do so. Officials also said they hope Kansas will launch betting by the NFL season, the major event in the US for sports gaming.

Hollywood Casino at Kansas Speedway

While regulation around the new form of wagering is still being drafted, Penn National has been revealing details of their planned new amenities. “It'll be a wonderful full sit-down restaurant, enormous bar in the center, plenty of betting kiosks," Rick Skinner, VP and General Manager of Hollywood Casino at Kansas Speedway, told KSHB 41 News.

The former “Epic Buffet” space in the casino will make way for the new sportsbook, and the company anticipates hiring more staff in light of the bill. While the timing on when exactly sports betting will launch is still cloudy, with the law calling for it to be up and running by now later than Jan. 1, 2023, Hollywood Casino plans to use a temporary area when it gets approved in order to enter the market as quickly as possible.

The casino further expects the sports betting law may also attract bettors from other states “if Missouri doesn’t pass anything” in the near future. Legislation that would legalize sports betting in the Show Me State is in the hands of the state Senate, with the session ending today.