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Minutes for HB2671 - Committee on Federal and State Affairs
Short Title
Authorizing sports wagering under the Kansas expanded lottery act.
Minutes Content for Wed, Mar 11, 2020
Chairperson Barker opened the proponent hearing on HB2671. He stated that there are two bills -- SB283 and HB2671 -- which are different in many ways. There were some issues regarding dogs and horses when the Senate heard SB283. HB2671 is not a parimutuel bill; it is a sports gaming bill. The United States Supreme Court ruled a couple of years ago that other states could have sports gaming other than Nevada. Other states have allowed sports betting, and that is what this bill is about.
Jason Long gave an overview of HB2671 (Attachment 1) as well as a comparison briefing on the differences between HB2671 and SB283 (Attachment 2). Questions were asked by Representatives Frownfelter, Humphries, Ruiz, Carpenter, Smith, Woodard, Thomas, and Chairperson Barker. The Revisor stated that he would provide the data that they have collected on what other states have done relating to their tax rates. The percentages in SB283 were 10 percent and 7 1/2 percent. When it went to the Senate floor, the floor amendment directed two percent of the sports wagering revenues to the problem gambling and addiction fund, which came out of the State's percentage, dropping the State's percentages to eight percent and five and a half percent. Chairperson Barker stated he would have that information provided by the Research Department distributed to the Committee. The Senate now has a position on the percentages, but the House needs to establish a position so that when it goes to conference committee, it can be negotiated.
In response to a question by Chairperson Barker, the Revisor stated that SB283 allows the I-Lottery to have a mobile app if there is one other casino, but they have to wait two years to implement it while HB2671 allows them to have the mobile app immediately. Also, SB283 states that the sports wagering data should only be kept for a short period of time -- 60 days on the $1,200 bets and on larger amounts there's another period of time. HB2671 states that the data is to be kept for three years. Chairperson Barker stated that the statute of limitation is two years, and sometimes it takes longer than that to prosecute a case so he feels the data should be kept longer than what the senate bill calls for.
Chairperson Barker recognized Jason Watkins of HB2671 on behalf of Kansans for Fair Play (Attachment 3). Mr. Watkins stated that his organization supports the reopening of the horse and dog tracks in Kansas. The tracks are closed because of the disparity in the tax rates between the tracks and the casinos. The tracks pay 40 percent while the casinos only pay 22 percent on slots revenue. Not having the tracks results in a huge missed opportunity in terms of economic development. His organization supports HB2671.
Chairperson Barker recognized Jeff Rutland on behalf of the Kansas Quarter Horse Racing Association (Attachment 4). Mr. Rutland stated that racing should be a part of sports wagering. The amount of revenue generated through sports betting would not compare to the $200 million that would be generated from the breeding and raising of horses throughout the state. The Woodlands could create over 4,000 jobs and a $200 million economic impact could be generated back to the State without any other state funding or incentive to bring this industry back.
Chairperson Barker recognized Tom Palace, who testified on behalf of the Petroleum Marketers and Convenience Stores Association of Kansas (PMCA) (Attachment 5). He stated that the convenience and grocery retailers are the backbone of the Kansas Lottery. There are approximately 1,200 convenience stores in Kansas and they offer lottery games that generate millions of dollars to the state. HB2671 provides a window of opportunity for retailers who want to participate in sports wagering, and it is a natural fit for them. Retailers offering lottery tickets are contracted with the Kansas Lottery, have a financial track record with the Lottery, have sufficient resources to support activities required to conduct sports wagering, and would only be involved in Tier 1 sports wagering. He stated that the grocery store industry does not have a position on this bill.
Chairperson Barker recognized Jim Gartland on behalf of the National Greyhound Association (NGA) (Attachment 6). He stated that the NGA supports HB2671 since it may create opportunities for Kansas race tracks and racing. He believes as sports betting expands throughout the country, it is time for Kansas to become a player in the industry and reap the benefits in Kansas. He is concerned about the exclusion of horse and greyhound racing from the sports wagering process and would hope that the racing sports would be afforded the same opportunities that are being offered through mobile and internet wagering.
Michael Strickland was recognized by Chairperson Barker on HB2671 (Attachment 7) (Attachment 7A). He stated that he supports HB2671, but feels greyhound racing should be included in the bill.
Tracy Wildey was recognized by Chairperson Barker on HB2671 (Attachment 8). She stated that she raises greyhounds. She stated it is important that greyhounds be included in the bill.
Questions were then asked by Chairperson Barker to Mr. Palace; Representative Arnberger to Mr. Watkins and Ms. Wildey; Representative Karleskint to the Revisor; Representatives Carpenter and Frownfelter to Mr. Watkins; Representative Smith to Mr. Strickland; and Representative Humphries to Mr. Palace.
Chairperson Barker stated that there was written proponent testimony from Brandon Rein, Vice-Mayor of Abilene (Attachment 9); Rory Goree, Greyhound Pets of America (Attachment 10); Tonya Beader, GPA Kansas (Attachment 11); Gregg Burden, Kansas Commission on Veterans Affairs Office (Attachment 12); and Bob Alderson, Casey's General Stores, Inc. (Attachment 13).
Chairperson Barker recognized Brianne Doura-Schawohl, Director of the National Council on Problem Gambling (NCPG). He stated that he was allowing her to provide neutral testimony today since she was from Washington D.C., and would not be available tomorrow. She testified about the concerns they have with the proposed expansion of sports wagering (Attachment 14). She stated a better job must be done to prevent and treat problem gambling. There will be a vast increase in advertising, advances in technology, and an unlimited menu of betting opportunities far beyond game outcome. This amalgamation of advertising, access and action is unprecedented in the United States and throughout the world. Expansion of legalized sports betting will likely increase gambling participation and, simultaneously, the problems. The dangers of this trend can be mitigated by dedicating at least two percent of revenue to the problem gambling and addiction fund, developing robust and enforceable responsible gaming programs, and conducting surveys of prevalence of gambling addictions prior to expansion and at regular intervals thereafter. Questions were asked by Chairperson Barker and Representative Arnberger.
Chairperson Barker closed the proponent hearing on HB2671. There being no further business, the meeting was adjourned at 10:20 a.m.
