As Missouri gears up to launch online sports betting, lawmakers in neighboring Kansas spent the best part of six hours on Monday discussing whether there’s a better way to do things on their side of the border.
In the Special Committee on Federal and State Affairs on Sept. 22, members mulled potential changes to the sports betting framework that has been in place since 2022. Currently, Kansas has mobile sportsbooks in the state and taxes them at 10% of their net revenue.
The Kansas Lottery’s five-year contracts with operators end in September 2027, and a bill approved in April prevents the state from extending or renewing them before July 2026. Kansas law allows up to 12 licensed sportsbooks (three per casino), but only around half of those slots are filled.
Is 10% tax a success or a sliver?
Kansas’s 10% tax rate is one of the lowest in the country, and statistics presented by Kansas Lottery Executive Director Stephen Durrell noted it yielded $17.4 million in FY 2025. Whether that is sufficient three years on was a central topic of debate on Monday. “It depends on who you ask,” reflected Durrell.
Representing the Sports Betting Alliance, whose five members are all operational in Kansas, Scott Ward stressed that the state has made $36 million in new money from sports betting in three years, and that annual tax receipts increased 50% from FY 24 to FY 25. iDEA Growth’s John Pappas added that for January through August 2025, tax revenue is up 72% year over year.
Both Ward and Pappas also cautioned against thoughts of hiking the tax rate, noting that sportsbooks’ responsive operational changes would reduce the state’s financial benefit, as well as risks of driving play out of state or to the black market.
“The tax rate right now is working effectively at a 10% rate,” argued Pappas. “It’s been competitive and it leaves operators room to invest in promotions, technologies and their partnerships with the land-based casinos.”
Grass is always greener
Committee member Rep. Francis Awerkamp disagreed vociferously, citing state legislative research data from February 2025 that ranked Kansas 29th out of 33 states for sports betting tax revenue per $1 million wagered. “This is absolute failure from my perspective,” Awerkamp declared.
Awerkamp ventured whether Kansas would be better following the model of a state like Oregon by contracting a single sportsbook and taking “tremendously increased revenues” through that model. “Why would Kansas not do that?” he asked.
Durrell noted that’s up to the state legislature, but Ward, Pappas and Boyd Gaming spokesperson Ryan Soultz all cautioned against it, pointing to a lack of competition and fears of feeding the unlicensed market. Pappas, speaking via video from D.C., used his location as a cautionary tale, calling D.C.’s market “a failed experiment” as a monopoly before it opened up to welcome several sportsbooks in 2024.
Can sports betting lure the KC Chiefs?
After a mandatory $750,000 transfer to a crime fund, 80% of the remaining tax revenue from sports betting goes into the Attracting Professional Sports Teams To Kansas Fund, leaving 2% for problem gambling support and the remaining 18% for the state general fund.
Per Durrell’s numbers, approximately $26 million of the $36 million in overall state proceeds from sports betting has gone to that sports team fund in three years.
Kansas has been courting the Kansas City Chiefs and KC Royals to cross the border from Missouri and set up shop in new stadiums on the Kansas side. The state passed a measure in June 2024 to try to incentivize the two teams using STAR Bond funding, before Missouri responded this year by authorizing bonds to cover up to 50% of stadium costs and $50 million in tax credits for the teams.
The fact that so much money is set aside in Kansas for enticing Missouri teams didn’t sit well with Awerkamp, who said the creation of the fund was a last-minute addition to the sports betting legalization framework that “came from nowhere.”
Missouri loves company
Missouri is the multi-billion-dollar elephant in the room, given that its own sports betting market launch on Dec. 1 could have profound impacts on Kansas.
“We’ll see how that affects us,” remarked Durrell.
Both he and Pappas noted that Kansas City, MO residents cross the border in multitudes to bet in Kansas. GeoComply data last year suggested that 37% of more than 11 million geolocation checks detected in Missouri between Sept. 5 and Oct. 21 were attempts to access legal Kansas sportsbooks, and 3,745 sportsbook accounts originating in Missouri were spotted in Kansas a short time later.
“It would be an interesting time to raise taxes above 10% when you have competition opening right next door in Missouri with a market that is launching at 10%,” Pappas said. “We would encourage Kansas to stay the course, keep the multi-operator model and hold the line on taxes to ensure the market remains competitive.”
