House sports betting bill derailed

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A sports wagering bill that was headed to the House floor hit a pothole Monday when it was suddenly – and unexpectedly – sent back to the committee where it stalled.

Republican state Rep. John Barker, chairman of the Federal and State Affairs Committee, described it as a “housekeeping matter” after some problems were found in the legislation on Friday.

The committee reworked the bill by eliminating a provision that cut the taxes on slot machines at racetracks to 22% from 40%, potentially making it more feasible for a racetrack owner to operate slot machines.

It wasn’t exactly clear why the tax cut – requested by casino mogul Phil Ruffin – needed to be removed from the legislation.

The tax cut provision, added at the last minute Friday, needed to be considered separately from the sports wagering bill, Barker said.

“It probably did not get good consideration because, in my opinion, it has nothing to do with sports book,” Barker told the committee.

“I oppose taxes any chance I get, but it needs to be a separate bill,” he said.

Rep. John Eplee introduced the amendment cutting the tax on track slots.

He agreed Monday to withdraw the amendment because there were “unforseen circumstances that I did not understand and was educated on.”

Barker reemphasized that the tax amendment had nothing to do with sports wagering and needed to be considered in a separate bill.

But when the committee went to pass out the bill a second time, it fell short of passage.

“You will see this again in the near future,” Barker said.

Last Friday, the committee approved the bill allowing sports wagering that was already much broader than one approved by the Senate.

In addition to cutting the tax on slots, the bill also authorized a vote for slot machines in Sedgwick County although there are questions about whether it violates a noncompete agreement the state has with its casino managers.

The 2007 law authorizing casinos in Kansas bars expansion of gambling in other areas of the state until 2032.

Five years ago, Kansas Attorney General Derek Schmidt issued an opinion saying that allowing a revote on Wichita’s Greyhound Park may breach the state’s contract with the Kansas Star casino in Mulvane.

Schmidt wrote that allowing a revote would potentially give the Mulvane casino cause to demand repayment of its privilege fee or other damages.

If the state is found to be in violation of the law, it could mean it would have to pay millions back to the casinos that have already paid privilege fees to operate in Kansas, plus years of interest, which could reach into the tens of millions of dollars.

The bill  provides a means for seeking a ruling from the state Supreme Court on whether expanding gambling in Wichita would violate the state’s noncompete agreement with the casinos.

Once the vote occurs, an action seeking a declaratory judgment can be taken to the Supreme Court to determine whether slots would be a legal expansion of gambling in Kansas.

Majority Leader Dan Hawkins, who supports the revote, said no contract for slots could be let until the Supreme Court resolves the question about a possible breach of contract.