The Kansas Expanded Lottery Act, which was passed during the 2007 Session of the Kansas Legislature, allows communities in the state to vote on whether they want casinos in four gaming zones and slot machines at existing pari-mutuel racetracks. The Kansas Lottery Commission has been established as the owner and operator of the venues and the Kansas Racing and Gaming Commission (KRGC) will be responsible for regulating gaming.

Kansas Governor Kathleen Sibelius has requested that Robert Krehbiel, at present serving on the Kansas Corporation Commission, be appointed to a new post of Chief Gaming Officer. According to Sibelius the new position is needed to oversee the recent gambling law that will allow four resort casinos in Kansas and video gaming machines at racetracks. The legislature wants it to be an interim appointment until it meets again for the new session in January 2008. The Kansas Expanded Lottery Act does not contain a provision for a chief gaming officer’s appointment.

Casino managers will have to compete to run the Kansas Lottery casinos. The Commission will negotiate the contracts but final selection will be made by the Casino Review Board. The 7-member board will make its choice by considering which casino management would best maximise revenue, encourage tourism and serve the best interests of the state of Kansas. The Kansas Lottery will retain powers to overrule the casino manager at any time.

The Kansas Lottery will move forward with the process of licensing four casinos and slot machines at the three pari-mutuels even though the Act may not comply with the constitution. The Attorney General is challenging the law’s validity so that the Supreme Court can make a final ruling on the matter. In the meantime the state may allow slot machines to be installed at the tracks once a central communication monitoring system is in place. The law allows up to 2,800 electronic gaming machines between the three racinos, with each facility allocated at least 600 machines. These could be operational by early 2008. Casino construction is not expected to begin until after the Supreme Court rules on the constitutional challenge.

The four casinos will pay an estimated US$145 million yearly (minimum 22% of gaming revenue) to the state plus 2% to a problem gambling fund. 40% net gaming machine revenue, estimated at US$87 million annually, will be paid by the three racinos plus a total 3% to the city and/or county concerned. Other percentages are allocated to racing, racing benefit funds and problem gambling. Under the law Kansas cannot increase the number of gaming machines allowed, nor permit more casinos until 1 July 2032.
(E-07.10.07)

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