Sam Mellinger

The challenges and potential of legalized sports betting in Kansas and Missouri

States race to pass sports betting laws after Supreme Court decision

In May, a Supreme Court ruling began allowing states other than Nevada to create their own legislation on sports betting. Five states have passed laws allowing sports betting, but where to Kansas and Missouri stand?
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In May, a Supreme Court ruling began allowing states other than Nevada to create their own legislation on sports betting. Five states have passed laws allowing sports betting, but where to Kansas and Missouri stand?

This week, many families in Kansas received back-to-school shopping lists. Those schools are constitutionally funded, finally, though the state Supreme Court will stay involved to make sure it stays that way.

Right now, in Missouri, state revenues are down while the government struggles with funding for schools and courts. You may have even noticed a pothole or two.

Today, yesterday, and tomorrow thousands of people in both states will place sports bets. Those bets are technically illegal, but rarely punished, the money leaking across borders without regulation, oversight or (most importantly) being taxed.

That’s our money, in other words. And we’re just letting it go.

Rep. John Barker, an Abilene Republican who chairs the Federal and State Affairs Committee, is among those working to pull Kansas into modern times by legalizing sports bets.

“We will give it some priority,” he said.

The Unites States Supreme Court made this an issue across the country by legalizing sports gambling last year. What once made Nevada unique and inspired bachelor trips and fantasy football drafts in Las Vegas can now happen anywhere. Build the infrastructure, and the bets (and revenue) will come.

The American Gaming Association estimates that up to $150 billion is bet illegally on sports every year in the United States, most of it on football. It’s a braindead reality, with states missing out on revenue and criminals being provided better cover.

Other states are moving fast. New Jersey, which led the effort to legalize, was taking legal bets within a month of the Supreme Court ruling. Last month, for the first time ever, more money was bet in New Jersey sports books than Nevada.

Missouri and Kansas are unlikely to approach the take of New Jersey or Nevada or more populated states like California and New York. But a study by Oxford Economics estimated $130 million in potential sales in Kansas and $325 million in Missouri.

The package would include nearly 3,000 jobs between the states, and more than $90 million in additional tax revenue. Assuming it’s popular, those numbers would only grow.

At the moment, 15 states have legalized or recently passed bills legalizing sports gambling. Missouri and Kansas are among the 29 to have introduced but not passed bills.

“I don’t think we’re in a race with other states,” Barker said. “But we also don’t want to fall behind.”

Steve Brubaker, a sports betting legislation analyst from Illinois, said that falling behind would not be a major problem for at least two reasons.

First, the gap between legalization here and neighboring states would likely be just a year or two. Also, logistics and geofencing on mobile bets — more on that in a minute — would limit the spillover from one state to the next.

The debate in Kansas and Missouri, thankfully, has moved past the pearl-clutching of whether to allow bets on sports and is now centered on how to implement.

Like anything involving lots of money, complications are everywhere. Most obviously, leagues want a taste with so-called “integrity fees” said to be about oversight but in reality more about profits. NFL.com’s Albert Breer reported one league executive believed sports gambling is how the NFL could get to commissioner Roger Goodell’s goal of $25 billion in revenue.

The NFL, MLB, and all leagues will want a say in how their games are used and — really, this is the part that matters — receive a cut of the action.

But that’s just the beginning of the complication. Missouri politicians introduced at least six different bills during the last session. Each are much the same idea with different tweaks — one allows the lottery to use sports events, one allows bets in casinos but not online, and one proposed a portion of the revenues be earmarked for stadium renovation or construction.

In Kansas, Barker said the issues are largely about finding a workable middle ground with casinos. The state owns and operates all four casinos in Kansas, but leases them out to operate.

Technically, that should make it easier for Kansas. They set the rules, and if the casino companies don’t like it they can be replaced.

“Well, this is politics,” Barker said. “I’m working for the people of the state of Kansas. But the casinos can go out and hire 10, 15 lobbyists.”

The possibilities are endless, up to and including sportsbooks or kiosks set up inside stadiums. So-called tier two bets — who will hit the first home run or score the first touchdown, for instance — could be particularly popular there.

In the new reality, geofenced online betting will require you to physically be in a state to bet and prohibit you from betting through other states. That’s particularly important in states with large rural areas like Kansas and Missouri, where politicians are also exploring the ability to bet in local convenience stores the same way you can buy a lottery ticket..

Whatever the outcome, it does seem more a matter of when than if. This is far from the most important issue facing either state, but it’s a relatively easy win for politicians who can generate instant revenue. More than 60 percent of Americans are in favor of legalized sports betting, so it’s a popular issue with constituencies.

The implications are particularly interesting for Missouri. Chiefs chairman Clark Hunt, who was unavailable for this column, has expressed an interest in how gambling can help the league grow.

Cardinals president Bill DeWitt III supports a bill sponsored by Missouri Rep. Cody Smith (R-Carthage) that would prohibit online betting but set aside 0.6 percent of the take for stadium renovations. That would be particularly impactful in Kansas City, and not just by finally squashing the idea of the Royals or Chiefs moving across the state line.

This is all in the idea stage, nothing official, but some extra millions would be nice as the Chiefs and Royals contemplate their futures. Maybe the new money is enough to help build a new baseball stadium downtown, and a new and modern Arrowhead with more surrounding development at Truman Sports Complex.

The case for that to be our best sports future is compelling, for lots of reasons, many of which we’ll explore in this space soon.

For now, the important stuff is that Missouri and Kansas are moving forward. They are not leading the way, but are also positioned to at least not fall behind. Even if the final bill isn’t passed until late in the next legislative session, casinos are equipped and motivated to act quickly. You could likely place a legal bet within six months of a bill passing. If something passed late in the next legislative season, you could bet on the next Super Bowl and NCAA Tournament.

To get there, politicians need to find a workable middle ground with casinos and leagues. Once there, they will have opened brand new revenue streams, the found money available to make our states better places to live.

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Sam Mellinger is a sports columnist for the Kansas City Star, where he’s worked since 2000. He has won numerous national and regional awards for coverage of the Chiefs, Royals, colleges, and other sports both national and local.
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