Kansas sports betting market shaken up by budget provision approval
Lawmakers approved a small but significant last-minute amendment to the state budget SB 125 on Friday, the last day of Kansas’ legislative session.
The amendment says that for the 2025 and 2026 fiscal years, “no expenditures shall be made by the above agency from monies appropriated from the state general fund or from any special revenue fund… to negotiate or enter into any contract or extension or renewal of an existing contract for the management of sports wagering with any lottery gaming facility manager.”
This indicates that the market will not be immediately impacted, but its long-term outlook is uncertain. Jeremy Kudon, lobbyist for the Sports Betting Alliance (SBA), clarified on X that “most contracts with the lottery will run well into 2027”. The SBA represents FanDuel, DraftKings, BetMGM and Fanatics.
In addition to those four, Caesars Sportsbook and ESPN Bet also currently operate in the Sunflower State. According to Covers, the six books are licensed through 27 August 2027. If nothing changes by then, it would appear based on the language that they would cease operations in the state. The just-passed amendment has an expiration date of 30 June 2026. Sports betting went live in Kansas in 2022.
SBA members referred to the organisation for comment, which pointed to Kudon’s post above. The iDevelopment and Economic Association (iDEA), which also represents the SBA books, decried the policy change.
“This is reckless budget maneuvering that threatens to pull the rug out from under a successful, regulated sports betting market,” iDEA’s state advocacy director John Pappas told iGB. “It serves no meaningful fiscal purpose, but it will take dollars and consumer protections away from Kansans – pushing them toward illegal, unregulated gambling sites that pay no taxes and offer no safeguards. It’s bad policy, bad process, and bad for Kansas.”
Lawmakers eyeing a single-source model?
The just-passed amendment on licence renewals does not prohibit wagering overall, but could have significant impacts on the state’s market structure. Sources indicated to iGB that a resolution can be reached by the amendment’s expiration date.
But there is also some belief that officials could pursue a single-source model, which so far has not performed well in the markets in which it has been implemented.
The most notable example is Washington DC, whose market for years underperformed under a sole-source framework. District officials ultimately opened the market to multiple platforms last July and have since enjoyed higher revenue and engagement. Monopolistic frameworks are generally opposed by the industry, which argues that less competition is bad for consumers and severely limits tax revenue potential.
“Apparently in the red state of Kansas, they want to figure out how communism doesn’t work again,” said Brendan Bussmann, managing partner at B Global Advisors. “You see what you get with stability in driving revenue. The same should be held today on any expansion of gaming that was done three years ago.”
In March, Kansas sports betting posted $248.4 million in handle and $8 million in revenue, per the state lottery. Handle decreased slightly (-1.7%) year-on-year but revenue increased 12.4% from March 2024. The state received $803,000 in taxes for the month and its fiscal year total is currently at $13.1 million.
Books grappling with rising number of policy changes
The recent developments in Kansas highlight a growing trend of policy changes for bookmakers around the country. Illinois, which originally launched with a 15% tax rate, in 2024 implemented a sliding scale based on revenue that ranges from 20% to 40%.
Ohio launched with a 10% rate before doubling it to 20% in 2023. Ohio governor Mike DeWine proposed another doubling to 40% this year but that did not gain traction. Maryland this year increased its rate from 15% to 20%, although its governor, Wes Moore, had originally proposed a hike to 30%.
A Massachusetts bill proposed this year seeks to increase its tax rate to 51% and impose several new regulations, including bans on in-play and prop betting as well as advertising restrictions. Another bill introduced in Vermont seeks to abolish the state’s sports betting and lottery industries altogether.
All the while, federal lawmakers are also proposing the SAFE Bet Act, which would essentially transfer oversight of sports betting to the federal level. The situation in Kansas could be another factor companies must now account for.
“All these states are doing is further amplifying the illegal market that has thrived for decades not paying taxes while harming people that want to do business regulated and through legitimate suitability,” Bussmann lamented.