Lawmakers are working on a proposal that could remove a major obstacle to sports wagering in Kansas by bringing gambling back to a darkened track in Sedgwick County.
A bill now in the works in the House would authorize a very different type of electronic gaming in Sedgwick County that’s known as historical horse racing.
The bill potentially could resolve political issues with casino mogul Phil Ruffin, who has wanted any sports wagering legislation to include now-defunct Kansas racetracks.
The bill authorizes what is known as historical horse racing, which plays like a slot machine but uses previously run horse races to determine winning combinations and the payouts for bettors.
The bill would not require a vote for the machines and would limit historical horse racing only to Sedgwick County.
It is very different from a bill that already passed in the Senate authorizing the state’s four casinos to contract with the Kansas Lottery to manage and operate a sports book on behalf of the state.
House Majority Leader Dan Hawkins said the proposal would get Greyhound Park back open without interfering with the law that authorized casino gambling in Kansas.
“It gives us probably the best of both worlds,” Hawkins said.
Historical horse racing has been around for a little more than 20 years when it was first proposed by the general manager of Arkansas’ Oaklawn Park racetrack in 1997.
Historical racing machines allow betting on randomly generated, past horse races with the games typically showing video of condensed horse races.
The gaming industry says it’s different from slot machines, which rely on a random number generator compared to historic racing that’s based on races from across the country and around the world.
“You are placing a wager within a pool,” gaming consultant Brendan Bussmann told lawmakers in a hearing last month.
“It’s not a random number generator. It’s not what you see in Vegas,” Bussmann said.
“It’s completely different than if I sit at a slot machine and just do this all day,” Bussmann said has he waved his finger in the air as if pushing a button.
Because historical horse racing would be defined under the bill as parimutuel wagering, a public vote would not be required as it would be for slot machines.
“Historical horse racing is parimutuel. It does not require a vote and there’s no question about that,” said Kansas City lawyer Scott Beeler, who has represented Ruffin Properties in the Legislature.
“I don’t even think the casinos would argue that. They may argue whether it’s an expansion of gaming, which I think they can do that until the cows come home and I don’t think they will win,” Beeler said.
“I don’t think they would have any basis to say that parimutuel in and of itself requires a vote,” Beeler said.
As lawmakers hammer out a bill, there are still some unknowns such as the tax rate on the historical horse racing machine and how many would be allowed.
The bill is still a work in progress and has been throughout the weekend as revisions have been made. The legislation could be introduced as early as Tuesday.
Under the Kansas expanded gaming law passed in 2007, a public vote would be required to have slot machines at the now-defunct Greyhound Park in Sedgwick County.
Greyhound Park closed in 2007 after Sedgwick County voters turned down a proposal that would have allowed slot machines at the facility.
Two years ago, the Sedgwick County Commission refused to put the issue on the ballot, saying that was the authority of state lawmakers.
Commissioners expressed concern that the election could have made the county and state vulnerable to lawsuits because it could have violated the state’s noncompete agreements with its four casinos.
The 2007 law authorizing casinos in Kansas bars expansion of gambling in other areas of the state until 2032.
Six years ago, Kansas Attorney General Derek Schmidt issued an opinion saying that allowing even a revote on Greyhound Park may breach the state’s contract with the Kansas Star Casino in Mulvane.
If the state was 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.
It was unknown whether Boyd Gaming, the company that manages the Kansas Star Casino in Mulvane south of Wichita, would go along with the new legislation.
The sports wagering legislation now being drafted would give the casino the ability to challenge historic horse racing in the Kansas Supreme Court.
Republican state Sen. Jeff Longbine of Emporia has sponsored the legislation over in the Senate.
“I don’t view historic racing machines any differently than I do slot machines,” Longbine said.
“I think they’ve been found to be slots in a number of states,” he said. “If they’re slots, we need to treat them as slots.”
The Senate already has a position on gambling, he said.
“Until the House comes up with a position or the Senate changes their position, they’re not included,” he said.
Historical horse racing has not always been defined as parimutuel wagering.
Two years ago, the Kentucky Supreme Court found that at least some historical racing games do not meet the standard for parimutuel wagering because it did “not create a wagering pool among patrons such that they are wagering among themselves as required for parimutuel wagering.”
A year later, Kentucky lawmakers passed legislation to address the court ruling by adding historical horse racing into the definition of parimutuel wagering.
Just last month, the Oregon Justice Department issued an opinion that historic horse racing machines are tantamount to a casino and would violate the state’s constitution.
Nebraska Attorney General Doug Peterson sued the state racing commission in 2020 after it approved historical horse racing.
Peterson contended that parimutuel wagering could only be conducted based on the results of live or simulcast horse races under licenses granted by the commission.
Historical horse racing “consists of neither live nor simulcast horse races,” Peterson said in the lawsuit against the commission.
“Wagering on HHR machines is therefore unauthorized, void, and unlawful.”
The House bill also would be different from the Senate bill when it comes to betting on sports.
The bill being crafted in the House would allow the casinos to make deals with 50 businesses to offer sports betting of which 10 have to be with nonprofits.
Last year, the House bill called for offering sports wagering at 1,200 lottery retail outlets across the state, which casino executives say would give Kansas more locations to gamble on sports than any state in the country.
The Senate bill only allowed sports betting at the four casinos. Each casino may use up to three mobile apps approved by the lottery to conduct sports wagering. The apps could only accept bets from someone physically in the state.
A draft of the House bill shows that the state would impose a 20% tax on bets placed online and 14% from bets placed at the facility.
The Senate had proposed a 5.5% tax from sports bets placed in person at a casino and 8% of from bets placed online.
How does historical race work
Here are a couple of videos that demonstrate how historical racing works.