For the past two seasons, Kansas City Chiefs fans living in Missouri have had to trek to the west of State Line Road if they wanted to place a legal wager on their favorite NFL team. However, Chiefs fans from the Show-Me State may have to move their tailgate parties to the other side of the border if Kansas officials get their wish.
Gov. Laura Kelly signed House Bill 2001 on Friday, one day after it landed on her desk. The bill, which the Kansas Legislature passed on Tuesday during a special session, expands the use of a state bond program to entice the Chiefs and baseball’s Kansas City Royals to relocate to the Sunflower State. Those bonds would be paid for, in part, by the revenues the state receives from the 10% tax it levies on the six licensed operators approved to take wagers in the state.
Kelly is not expected to veto the legislation.
“We know that modernizing our economic development tools provides the opportunity to increase private investment into the state,” Kelly said in a statement Friday. “By modifying the STAR Bonds program, one of our strongest economic development mechanisms, lawmakers crafted a viable option for attracting professional sports teams to Kansas.”
The Royals have been pushing for a new ballpark to replace Kauffman Stadium, and the Chiefs initially sought to upgrade Arrowhead Stadium, both of which are located in the Truman Sports Complex. Jackson County, Missouri, voters, though, rejected a sales tax plan to partially fund the initiatives in an April vote. That has spurred the teams to look elsewhere in the region to find new places to play.
Both teams expressed their thanks to Kansas lawmakers for passing the bills. There’s no guarantee yet that either or both teams are ready to jump across state lines. Still, Sunshine State lawmakers put themselves in a position to make the offer thanks to legalizing Kansas sports betting two years ago.
Sports Betting Tax Designed For This Purpose
Kansas lawmakers specifically included a provision to attract professional sports as a way to dedicate revenue generated from the tax it places on operators like DraftKings, BetMGM Kansas and Caesars Sportsbook.
On its own, the sports betting tax proceeds won’t cover the cost of paying down any bonds issued. Lottery proceeds and sales tax dollars generated from the stadiums and surrounding areas would also be included. Under the bill, those proceeds would combine to pay for up to 70% of the cost for one or two facilities.
That said, sports betting revenue has been on the rise in Kansas in recent months. According to our calculations at BetKansas.com, the state has generated $15.8 million from operators. The lion’s share, though, has come in the current fiscal year, as the state has received $10.8 million with one more month left in the cycle.
Kansas likely will not be able to double its sports betting tax revenue annually. However, there’s still room for growth in the Kansas sports betting market, and should either team or both make the move, it’ll open the door for the state to generate even more through wagering.
Why Missouri Can’t Follow Suit
The Kansas proposal to the Chiefs and Royals comes as Missouri may finally decide on sports betting later this year. Petitions calling for a constitutional amendment to allow it attracted more than 340,000 signatures, which should be more than enough to get the proposed referendum on the November ballot. State election officials, though, are still verifying signatures of registered voters, and the final decision may not be known until maybe early August.
Even if Missouri voters legalize sports betting, the state will not be able to leverage the proceeds from it to offer a counterproposal to Kansas City’s MLB and NFL teams. The language in the amendment calls specifically for the sports betting tax revenue to fund public education in the state. That would preclude state lawmakers from shifting it to other priorities, like funding stadiums to keep the KC teams in Missouri.
The most likely way Missouri could use sports betting to fund new stadiums would be if the constitutional amendment fails and lawmakers act in next year’s legislative session. That would be risky, though, because sports betting could be seen as a less enticing measure to some elected officials after a failed public vote.
Both the Royals and Chiefs are part of Winning for Missouri Education, the group backing the proposed referendum.
“We stand united with all of Missouri’s professional sports franchises in support of the campaign and believe that it is time for Missourians to have the opportunity to legalize responsible sports betting while generating tens of millions of dollars for our public schools each year,” said Adam Sachs, the Royals senior vice president and chief external affairs officer in a statement last month.
USA Today photo by Mark J. Rebilas.
