Is Legal Kansas Sports Betting Really In Peril?

The social media site X was alight Friday with warnings that the sky — in relation to sports betting — is falling in Kansas. A morning post by a local sports radio host who wrote that “sports betting apps could go dark in Kansas” touched off a day of confusion and concern.

The upshot, however, is that sports betting will remain online in Kansas for the foreseeable future.

At issue are two sections of a budget amendment about the Kansas Lottery that seem to have been misconstrued. Gov. Laura Kelly approved SB 125 April 10 with a series of line-item vetos. Among them were two sections of the bill relating to the Kansas Lottery and sports betting operators. The same day, the Senate unanimously overrode the veto. The House did not, but came back April 11 with an override. That means that this language remains in the amendment:

Sec. 8.
KANSAS LOTTERY
(a) During the fiscal year ending June 30, 2025, notwithstanding the provisions of K.S.A. 74-8734 and K.S.A. 2024 Supp. 74-8781, and amendments thereto, or any other statute, no expenditures shall be made by the above agency from moneys appropriated from the state general fund or from any special revenue fund or funds for fiscal year 2025, as authorized by section 64 of chapter 88 of the 2024 Session Laws of Kansas, this or other appropriation act of the 2025 regular session of the legislature, 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: Provided, That “sports wagering” and “lottery gaming facility manager” mean the same as defined in K.S.A. 74-8702, and amendments thereto.

A second section includes the same language but refers to the fiscal year ending June 30, 2026.

In essence, these sections mean that the lottery cannot negotiate with existing sports betting operators between now and June 30, 2026. The lottery and the Kansas Gaming and Racing Commission (KRGC) first launched retail and digital sports betting Sept. 8. 2022 and the state legislature legalized May 12, 2022.

Operator contracts valid for 5 years

State law allows for up to a dozen digital platforms, as each of the state’s four casinos can partner with a maximum of three platforms. There are currently six platforms available. Barstool Sportsbook, BetMGM, Caesars Sportsbook, DraftKings, and FanDuel all launched Sept. 8, 2022. PENN Entertainment, which operated Barstool Sportsbook, shuttered that site and relaunched with the ESPN Bet on Nov. 14, 2023. Fanatics Sportsbook launched March 28, 2024.

Kansas has a unique setup for sports betting regulation. The state technically owns all gaming, and casino operators are “managers.” Because of this, each of the state’s four casinos must contract with the lottery to operate sports betting. In addition, each casino’s sports betting partner must also contract with the state.

In order to get a license to offer sports betting in Kansas, operators were required to sign a contract with the lottery. In that contract, it reads:

Term of Agreement. This Agreement will terminate five (5) years after the Commencement Date or by operation of law, unless this Agreement is terminated earlier or renegotiated in accordance with the terms set out below.

Five of the six live operators would have signed contracts sometime between legalization (May 2022) and launch (September 2022), which means that the earliest a contract would expire would be between May-September 2027. And per the language in SB 125, it appears that the lottery cannot spend time or money to begin renegotiations before June 30, 2026. At that point, the new moratorium will have expired, and operators and the lottery could get back to business as usual.

If operators want or need to begin renegotiations sooner, they could seek a legislative fix during the 2026 session.

Multiple industry sources expressed frustration Friday, and Jeremy Kudon, lobbyist for the Sports Betting Alliance, tried to set the record straight.

The backstory, one source told Casino Reports, is that lawmakers looking to rewrite the 2022 Kansas sports betting law included the negotiation moratorium in the budget amendment. Stakeholders believed the issue was dead when Kelly, a sports betting supporter, issued her line-item veto. But it resurfaced with the veto override votes.