Sports Betting Integrity Fees Coming to Kansas?

Map featuring Kansas
Kansas may adopt sports betting integrity fees.

30-second summary

  • Kansas has been considering sports betting legalization for some time
  • New sports betting bill proposes a 0.25% integrity fee on each wager
  • The Kansas lottery would also be the sole operator of sports betting
  • People are expressing concerns about the potential lack of competition

Road to Kansas sports betting legalization

Kansas legislators have been considering sports betting legalization mostly in private discussions, but new developments have emerged now that the 2019 legislative session has opened.

Many lawmakers are optimistic that sports betting will be legalized by the end of 2019. The leader of the House-Senate committee on this issue is the Republican Senator Bud Estes. The committee has been discussing the issue with numerous key industry stakeholders on the best approach to take.

These stakeholders include lottery ticket sellers, casino managers, industry lobbyists, major sports league representatives, and state regulators. They are trying to cover all of the bases as well as they possibly can. They want a sturdy framework for sports betting legalization that will stand the test of time.

Recent developments

The first meeting of the National Council of Legislators took place at the start of January for gaming states. Estes sent some committee members to the meeting so they could get an insight into how other states are handling legal sports betting. Some were concerned that the lack of transparency could be an issue because of the private drafting of the bill.

State lawmakers are now said to be considering an integrity fee. That would mean that a percentage of every sports bet goes to the sports league responsible for the event. The main supporters of these fees are the MLB and NBA.

However, the problem with integrity fees is that they would slice off even more of the already tight margins sports betting operators are dealing with. No state has yet included integrity fees in its sports betting bill.

Even the leagues themselves are moving away from pushing for integrity fees. Instead, they are putting more of their efforts into getting operators to pay fees to use live league data.

What does the bill look like?

The sports betting bill is known as the Kansas Wagering Act and is Senate Bill No. 23. It would place the Kansas Lottery in charge of offering sports betting at physical locations and online. Only facilities under the Kansas Lottery operation would be able to offer sports betting, such as approved gaming facilitates, retailers, and racetracks.

Online sports betting would be developed by the lottery, along with an interactive platform for sports betting. The proposed integrity fee would be 0.25% of the total amount wagered on a given sports event and would be payable quarterly. However, there is a stipulation that this figure cannot be more than 5% of the gross revenue wagering amount each quarter.

The minimum age for sports betting would be 21. Those involved in sports, including athletes, referees, team owners, and coaches, would not be allowed to place sports bets.

Resources would be established to help problem gamblers, such as toll-free hotlines. The bill still has a lot of hurdles to overcome. The next step is to go before the committee, then the full legislature. If passed by the legislature, the bill would have to be signed by the governor to become.

Does the bill have potential?

There is a lot of concern about the integrity fee on sports betting because margins are so tight. It does depend largely on what sort of tax rate the state implements. If the tax rates are sufficiently low, then it may be viable.

There is also some debate as to whether it is appropriate to have the state lottery as the main operator of sports betting. The lack of competition could be an issue and could lead to a subpar experience for bettors.

One of the main advantages of legalization would be to stamp out the rampant black market for sports betting in the state. These revenues could be going towards the state coffers rather than into the hands of criminals.

Many believe that this could also be a stepping stone to introducing resort casinos into the region. This would bring significant investment in local areas, creating jobs and stimulating the local economy.