Kansas enacts law to use sports betting revenue for potentially luring Chiefs and Royals

Millions in Kansas sports betting revenue may soon be directed to lure the Kansas City Chiefs or the Royals to the state, following the recent signing of bill HB 2001 by Governor Laura Kelly (D). The new law amends the Kansas STAR (Sales Tax and Revenue) bond program, enabling the potential funding of stadiums for these teams.

The revised STAR bond program allows bonds to cover up to 70% of the total cost of constructing new stadiums, with repayment sourced from future tax revenues generated by the stadiums and nearby retailers, as well as from sports betting and lottery revenues.

Representatives from both teams have expressed support for the legislation. "We support their efforts to expand the existing program and congratulate them on passing the legislation in special session. We look forward to exploring the options this legislation may provide," the Kansas City Chiefs said in a statement.

Under the amended STAR bond program, funding can now be allocated for one or two major professional sports complexes within Kansas. Unlike other STAR bond projects, which are limited to 50% funding of total costs, these sports complexes can receive up to 70% funding from STAR bonds. Developers would be responsible for the remaining 30%.

The bill stipulates that any lottery and sports betting revenues exceeding $71.49 million annually will be used to repay the STAR bonds. Fiscal estimates indicate about $10 million per year could be allocated for this purpose.

The estimated cost for a new Chiefs stadium complex exceeds $2.5 billion, while a new Royals complex is projected to cost over $1.5 billion. The majority of these expenses would be offset by future tax revenues from the stadium complexes, with sports betting and lottery revenues contributing a smaller portion.

Discussions about funding a new Chiefs stadium and potential relocation have circulated for years. In 2022, rumors intensified when Kansas City Chiefs President Mark Donovan mentioned exploring all future options for the team, including relocating out of Missouri. Currently, Arrowhead Stadium's lease in Missouri extends until 2033.

Two months ago, Missouri voters in Jackson County rejected a proposal for a 40-year, three-eighths cent sales tax to keep the Chiefs and Royals in Missouri. The defeat of this proposal has now put all relocation options back on the table.

As Kansas moves forward with its new legislation, the future locations of the Chiefs and Royals remain uncertain, with Kansas positioning itself as a potential new home for the storied franchises.