Kansas may use betting revenue to lure Chiefs, Royals over border

Kansas may use betting revenue to lure Chiefs, Royals over border
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Revenue from sports betting in Kansas could be used as part of a lure to entice either Super Bowl champions the Kansas City Chiefs or MLB franchise the Kansas City Royals over the border from Missouri.

Kansas lawmakers and Gov. Laura Kelly have passed bill HB 2001, which amends the Sales Tax and Revenue (STAR) bond program with the aim of potentially enticing Kansas City, Miss.-based major league sports teams to relocate. In particular, it could help to fund the future construction of a new Chiefs or Royals stadium in the state.

The summary of HB 2001 states that the bill, “authorizes agreements with one or two major professional sports franchises for the purpose of establishing major professional sports franchise STAR Bond project districts for a major professional sports complex.”

The Republican-led legislature had approved the measure via bipartisan supermajorities. The House voted 84-38 and the Senate approved it 27-8.

The Kansas City Star reports that both teams are both in favor of the legislation and the Missouri Independent adds that both have suggested they would be willing to move from their current respective homes of Arrowhead Stadium and Kauffman Stadium, each of which are based at the Truman Sports Complex in Kansas City, Miss.

The Chiefs wrote in a statement that, “we look forward to exploring the options this legislation may provide” and the Royals added that they “look forward to additional conversations as we evaluate where we will play baseball in the future.”

“Kansas now has the opportunity to become a professional sports powerhouse with the Chiefs and Royals potentially joining [Major League Soccer’s] Sporting KC as major league attractions, all with robust, revenue-generating entertainment districts surrounding them providing new jobs, new visitors and new revenues that boost the Kansas economy,” said Gov. Kelly last week, before signing the bill into law.

However, there is no guarantee that either team will pursue a move across state lines even with this legislation now passed.

Gaming revenue would make up a fraction of the cost

STAR bonds are funded through future tax revenues on-site and in the vicinity of the stadiums as well as dollars from sports betting and lottery revenues. State bonds would cover up to 70% of the cost of a new stadium and then be paid off over 30 years with those revenues. The remaining balance of the cost, a minimum of 30% of the total cost, would be privately funded.

Gaming revenue would be the minority of that 70% chunk. The bill states that every June from next year, any revenue from the aggregate total transferred from the Lottery Operating Fund to the State Gaming Revenues Fund (SGRF) in excess of $71.49 million would be transferred to the Attracting Professional Sports to Kansas Fund.

Estimates from this spring projected that aggregate lottery revenue in Kansas will amount to around $85.8 million for FY 2024. That would currently equate to a transfer of $75.5 million to the SGRF, once contributions to community funds are factored in. If all other things remained equal, betting and gaming revenue would currently make up just a few million dollars.

The bill requires these projects to have a minimum capital investment of $1 billion. Estimates suggest that building a new stadium and surrounding amenities would likely cost between $1.5 billion and $2.5 billion all-in. The authority to establish such projects would sunset on June 30, 2025, with the option of a one-year extension if approved by the Legislative Coordinating Council, the bill clarifies.