Background
U.S. Supreme Court Decision
In Murphy v. NCAA, the U.S. Supreme Court held a 1992 law prohibiting states from allowing betting on sporting events to be unconstitutional. The Professional and Amateur Sports Protection Act (PASPA) of 1992 had prohibited all sports lotteries except those allowed under state law at the time PASPA was passed, which included only Delaware, Montana, Nevada, and Oregon.
In 2018, the U.S. Supreme Court issued the Murphy ruling that PASPA was unconstitutional on the grounds that the federal law prohibited the modification or repeal of state law prohibitions and unlawfully regulated the actions of state legislatures.
State Action Since Murphy v. NCAA
As a result of the U.S. Supreme Court holding PASPA unconstitutional, states can legally regulate gambling on sporting events. Since the Murphy decision in May 2018, 39 states and the District of Columbia have legalized sports wagering. Kansas authorized sports wagering in 2022 through the enactment of House Sub. for Sub. for SB 84.
Review of 2022 House Sub. for Sub. for SB 84
In 2022, the Kansas Legislature passed House Sub. for Sub. for SB 84, which amended the Kansas Expanded Lottery Act (KELA) concerning sports wagering operations by the lottery gaming facilities, added new sections to KELA that are part of and supplemental to the Kansas Lottery Act (KLA), amended the Kansas Parimutuel Racing Act, and authorized operation of historical horse racing machines. The bill went into effect on July 1, 2022.
Sports Wagering Operations and Regulation
The bill authorized the Kansas Lottery (Lottery) to offer sports wagering in accordance with the KLA and KELA, through one or more lottery gaming facility managers (managers) who have contracted with the Lottery, and through one or more interactive sports wagering platforms (platforms) pursuant to a marketing agreement. Managers are allowed to offer sports wagering in-person at their facility or over the internet through websites and mobile device applications from up to three licensed platforms.
The bill also contained provisions regarding suppliers licenses, marketing agreements, advertisements, investigations, required records, and facility inspections and security measures.
The bill directed the Lottery to adopt rules and regulations regarding:
- The advertisement of sports wagering;
- Management contracts;
- The integrity of sports wagering operations;
- Permitting sports wagering managers and platforms to have employees located outside of Kansas;
- Permitting the establishment of online sports wagering accounts and the access to pre-established online accounts established in other states; and
- Allowing the carry-over of negative sports wagering revenues by managers.
The bill directed the Kansas Racing and Gaming Commission (KRGC) to adopt rules and regulations regarding:
- KELA and sports wagering;
- Certification requirements and enforcement procedures for persons owning at least 5.0 percent in a lottery gaming facility manager or racetrack gaming facility manager and an electronic gaming machine manufacturer, technology provider, or computer system provider who proposes to contract with a lottery gaming facility manager, a racetrack gaming facility manager, or the State for the provision of goods or services related to either gaming facility; and
- The suspension, revocation, or non-renewal of certification for certain employees involved in sports wagering.
Restrictions and Crimes Related to Sports Wagering
Compulsive Gambling and the Self-restriction List
The bill prohibited a manager from providing a line of credit to any person engaged in sports wagering and required managers to include information and tools to assist players in making responsible decisions. The bill also required a manager, upon request by an individual, to restrict such individual from placing sports wagers with such manager and take reasonable measures to prevent the individual from placing sports wagers.
Minimum Age
The bill prohibited any person under the age of 21 from directly or indirectly wagering on a sporting event.
Prohibited Wagering
The bill required sports wagering managers to use reasonable methods to prohibit certain persons, including, but not limited to, managers, owners, employees, athletes, coaches, and referees, from placing certain wagers. The bill also made it a Class A misdemeanor for certain persons to place a sports wager in the State of Kansas.
Crimes Related to Sports Wagering
The bill made amendments to and defined the following types of crimes:
- Misuse of nonpublic sports information;
- Sports bribery;
- Tampering with a sports contest;
- Conflicts of interest; and
- Gray machines.
[Note: For more information on gray machines, please see the article titled “Gray Machines” in this publication.]
Funds
The bill created the Sports Wagering Receipts Fund, the Attracting Professional Sports to Kansas Fund, and the White Collar Crime Fund. The bill also amended law related to the Problem Gambling and Addictions Grant Fund.
Other Provisions
The bill authorized wagering on historical horse races and amended law related to simulcast racing to prohibit the licensing for and displaying of simulcast greyhound races.
Recent Legislation
2023 Senate Sub. for HB 2058
Senate Sub. for HB 2058 amended state law to authorize any gaming compact concerning sports wagering to include provisions governing sports wagering outside the boundaries of Indian lands. The bill went into effect upon publication in the Kansas Register on April 27, 2023.
Tribal Gaming Compact Amendments
Since enactment of this bill, three of the four federally recognized Tribes in Kansas have negotiated with the State of Kansas to amend their gaming compacts to create and amend provisions concerning sports wagering on reservation lands. The Tribes include:
- Prairie Band Potawatomi Nation;
- Iowa Tribe of Kansas and Nebraska; and
- Sac and Fox Nation of Missouri in Kansas and Nebraska.
The Legislature approved these gaming compact amendments through the adoption of House and Senate Resolutions.
2025 SB 125 Proviso
The appropriations bill passed by the 2025 Legislature, SB 125, included proviso language prohibiting the Lottery from expending moneys to negotiate or to enter into any contract or extension of an existing contract or renewal of an existing contract for the management of sports wagering with any lottery gaming facility manager. The proviso language applies in FY 2025 and FY 2026.
[Note: The existing contracts between the Lottery and lottery gaming facility managers expire in August 2027.]
Sports Wagering Revenue
Sports wagering revenue is defined in KSA 74-8702 as total revenues from sports wagering, excluding voided tickets and after all prize-related payments are made and after federal excise taxes, free plays, or other promotional credits. Under 2022 House Sub. for Sub. for SB 84, management contracts for sports wagering include a provision stating that 10.0 percent of sports wagering revenue will be distributed to the Lottery Operating Fund and the remaining 90.0 percent of sports wagering revenue will be retained by the manager.
The state’s 10.0 percent share distributed to the Lottery Operating Fund is further distributed accordingly:
- The first $750,000 is credited to the White Collar Crime Fund;
- 2.0 percent is credited to the Problem Gambling and Addictions Grant Fund;
- 80.0 percent is credited to the Attracting Professional Sports to Kansas Fund; and
- The remaining 18.0 percent is credited to the State Gaming Revenues Fund/State General Fund.
The following table details sports wagering revenue and the State’s 10.0 percent share in FY 2023 through FY 2025. [Note: The table contains unaudited revenues from the Lottery’s sports wagering monthly revenue reports.]
Sports Wagering Revenues FY 2023–FY 2025
| Year | Settled Wagers | Revenues | State Share |
| FY 2023 | $1,676,590,108 | $58,726,207 | $5,872,621 |
| FY 2024 | $2,363,711,655 | $117,159,060 | $11,715,906 |
| FY 2025 | $2,672,881,517 | $174,538,442 | $17,453,844 |
By Elaina Rudder and Nicole Bergman
See Federal and State Affairs for more.