Uses of Problem Gambling and Addictions Grant Funds

The Problem Gambling and Addictions Grant Fund (PGAGF) is designed to support programs to address problem gambling and other addictions. The fund is administered by the Kansas Department for Aging and Disability Services (KDADS), with revenue collected from traditional lottery, casino gaming, and sports wagering.

Background

The “Problem Gambling Grants Fund” was created by 2000 Sub. for HB 2013 (bingo). The bill directed $80,000 of traditional lottery receipts and $20,000 of state bingo regulation receipts be credited to the fund. The grant program created by the bill was to provide assistance for individuals diagnosed as suffering from pathological gambling and to fund research regarding the impact of gambling on Kansans. The bill further authorized the administering agency to receive grants, gifts, contributions, or bequests for such purposes.

2007 SB 66 (casino gaming) renamed the fund to the PGAGF and directed 2.0 percent of the state proceeds from casino gaming to be transferred to the PGAGF annually. The bill also expanded the purpose of the fund to include programs to treat alcoholism, drug abuse, and other abusive behaviors.

2022 House Sub. for SB 84 (sports wagering) made the following changes to PGAGF revenue:

• Increased the annual transfer from traditional lottery receipts from $80,000 to $100,000.
• Provided that 2.0 percent of the State’s proceeds from sports wagering be credited to the PGAGF annually.
• Amended and added new PGAGF fund expenditure requirements that the funds be spent on the treatment, research, education, and prevention of pathological gambling, and funding a text message or chat helpline before authorizing expenditures to treat alcoholism, drug abuse, or other addictive behaviors and other co-occurring disorders.

Revenue to the PGAGF

Revenue to the PGAGF is based on lottery revenues, which are estimated every spring and fall as part of the Consensus Revenue Estimate (CRE) process.

For FY 2024, the Kansas Lottery estimates the following revenue to the PGAGF based on the Spring 2023 CRE estimates:

Revenue Source	Amount
2% of Casino Gaming	$8,230,000
2% of Sports Wagering	$102,452
Traditional Lottery	$1,000,000
Estimated FY 2024 Total*	$8,432,452

Expenditures from the PGAGF

Expenditures from the PGAGF are categorized as follows:

Medicaid Mental Health Expenditures. The KanCare Managed Care Organizations (MCO) contract with community mental health providers, including community mental health centers and private practitioners, to provide mental health services throughout the state, including alcohol and drug abuse treatment. In FY 2023, PGAGF funds provided 3.3 percent of the State’s contribution for Medicaid mental health expenditures.

Problem Gambling Services. These expenditures are made to third parties to support efforts to prevent problem gambling. In FY 2024, this amount was temporarily increased by $1.0 million to combat problem gambling due to sports wagering.

Administration. KDADS uses a portion of the PGAGF funds to fund 4.0 full-time equivalent (FTE) positions dedicated to supporting problem gambling prevention efforts.
Addiction and Prevention Services Grants. These grants are made to third-party providers to further the purposes of the PGAGF.

Historic Transfers

Historically, $700,000 was transferred annually from the PGAGF to the Governor’s Office for the Domestic Violence Grant Fund and Children’s Advocacy Center Grants Fund. Additionally, $500,000 was transferred to the Department of Corrections for the Community Corrections drug treatment program. These transfers were eliminated beginning in FY 2024.

For FY 2024, KDADS requests the following expenditures from the fund:

Expenditure Category	Amount
Medicaid Mental Health	$4,000,000
Problem Gambling Services	$1,074,053
Administration	$394,616
Addiction and Prevention Services Grants	$2,937,878
Requested Total	$8,406,547