On the final day of Kansas’ legislative session, lawmakers approved a crucial last-minute amendment to state budget SB 125. This amendment stipulates that for the fiscal years 2025 and 2026, "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." While this does not indicate an immediate impact on the sports betting market, it raises concerns about its long-term prospects. Jeremy Kudon, a lobbyist for the Sports Betting Alliance (SBA), noted on X that "most contracts with the lottery will run well into 2027.” The SBA includes operators like FanDuel, DraftKings, BetMGM, and Fanatics.
Along with these four companies, Caesars Sportsbook and ESPN Bet are also active in Kansas. Currently, these six sportsbooks are licensed through August 27, 2027. If no changes occur by then, it seems that operations could cease based on the amendment's language, which expires on June 30, 2026. Kansas first introduced sports betting in 2022.
In reaction to the amendment, the iDevelopment and Economic Association (iDEA)—which represents the SBA operators—criticized the policy change. John Pappas, iDEA’s state advocacy director, stated, "This is reckless budget maneuvering that threatens to pull the rug out from under a successful, regulated sports betting market. 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.”
While the amendment does not restrict wagering itself, it could significantly alter the market's structure. Sources suggest a resolution could be sought before the amendment expires. However, there are indications that officials might consider a single-source model, which has underperformed in other markets, notably Washington, D.C. There, officials expanded the market to include multiple platforms last July, resulting in increased revenue and engagement. The industry generally opposes monopolistic frameworks, asserting that they diminish competition, harming consumers and limiting tax revenue potential.
Brendan Bussmann, managing partner at B Global Advisors, remarked, "Apparently in the red state of Kansas, they want to figure out how communism doesn’t work again. 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 reported a sports betting handle of $248.4 million, with $8 million in revenue, according to the state lottery. While the handle decreased slightly by 1.7% year-on-year, revenue increased by 12.4% compared to March 2024, resulting in $803,000 in taxes for the month; the fiscal year total currently stands at $13.1 million.
These developments reflect a broader trend of policy changes affecting bookmakers across the United States. Illinois, for example, has shifted from a 15% tax rate to a sliding scale between 20% and 40% based on revenue. Ohio doubled its initial 10% rate to 20% in 2023, and its governor had proposed another increase to 40%, which did not gain traction. Maryland recently raised its rate from 15% to 20%, following proposals for a 30% increase by Governor Wes Moore. In Massachusetts, a proposed bill seeks to raise its tax rate to 51% while imposing new regulations that include bans on in-play and prop betting along with advertising restrictions. Vermont has introduced a bill aiming to eliminate the state’s sports betting and lottery industries.
Meanwhile, federal lawmakers are proposing the SAFE Bet Act, which would transfer oversight of sports betting to the federal level. Kansas’ recent actions add another layer of complexity for companies operating in this landscape. Bussmann expressed concern, saying, "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."
