Division of the Budget
Landon State Office Building Phone: (785) 296-2436
900 SW Jackson Street, Room 504 adam.c.proffitt@ks.gov
Topeka, KS 66612 Division of the Budget http://budget.kansas.gov
Adam Proffitt, Director Laura Kelly, Governor
February 16, 2021
The Honorable John Barker, Chairperson
House Committee on Federal and State Affairs
Statehouse, Room 285A-N
Topeka, Kansas 66612
Dear Representative Barker:
SUBJECT: Fiscal Note for HB 2199 by House Committee on Federal and State Affairs
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2199 is
respectfully submitted to your committee.
HB 2199 would allow the Kansas Lottery to enter into a contract with sports wagering
retailers, lottery gaming facility managers, racetrack gaming facility managers, or licensed
interactive sports wagering platforms to offer sports wagering in the state on behalf of the State of
Kansas through the Kansas Lottery. The bill would prohibit sports wagering for persons under 21
years of age. Lottery gaming facility managers and racetrack gaming facility managers would be
allowed to offer sports wagering in-person at their facility or over the internet through websites
and mobile device applications from a licensed interactive sports wagering platform approved by
the Kansas Lottery. The bill would allow the Kansas Lottery, lottery gaming facility managers, or
racetrack gaming facility managers to enter in to marketing agreements with professional sports
teams for the purpose of marketing sports wagering at their primary facilities. A professional
sports team is defined as an athletic team that operates at the major league level in the sport of
baseball, basketball, football, ice hockey, or soccer. The marketing agreement would allow sports
betting at kiosks located at the professional sports team’s primary facility and could provide access
to mobile device applications to allow sports wagering through the interactive sports wagering
platform at the primary facility. The marketing agreement would prohibit any owner, director,
officer, employee, or agent of the professional sport team from taking any bets, paying out any
prizes, or having any control or access to the interactive sports wagering platform.
The Kansas Lottery would not be able to contract with more than 1,200 sports wagering
retailers. The Kansas Lottery would be able to charge an application fee for sports wagering
retailers and licenses would be required to be renewed annually. Sports wagering retailers would
only be able to offer sports wagering that is determined solely by the final score or outcome of a
sporting event and the bet must be place before the sporting event has begun. The bill includes
qualifications for sports wagering retailers, including being at least 21 years of age, having
sufficient resources to conduct sports wagering, being current on state and local taxes, and not
The Honorable John Barker, Chairperson
Page 2—HB 2199
being engaged exclusively in conducting sports wagering. Sports wagering retailers could not be
convicted of a felony in the last ten years; convicted of crime involving illegal gambling activity,
fraud, dishonesty or deceit, or financial crime; a vendor doing business with the Kansas Lottery;
residing in the same household of an employee of the Kansas Lottery or a member of the Lottery
Commission; or providing false statements to the Kansas Lottery. The bill also allows
partnerships, corporations, or unincorporated associations to be a sports wagering retailer under
certain conditions. The Executive Director of the Kansas Lottery would be allowed to terminate
a contract with a sports wagering retailer if they fail to meet any of the applicable qualifying
standards or violate provisions of the contract. The bill would require sports wagering retailers to
participate in the debt setoff program.
The Kansas Lottery would be allowed to select an interactive sports wagering platform that
would be best able to serve the public convenience and promote sports wagering with marketing
plans developed by the Kansas Lottery. Once the contract with an interactive sports wagering
platform has been approved by the Kansas Lottery and background investigations approved by the
Kansas Racing and Gaming Commission, then lottery gaming facility managers or racetrack
gaming facility managers that have entered into a management contract for the operation and
management of sport wagering could use the interactive sports wagering platform. Lottery gaming
facility managers or racetrack gaming facility managers would be able to apply to the Kansas
Lottery to provide one additional graphical user interface specific to that facility that would be
used to access the interactive sports wagering platform provided by the Kansas Lottery. Each
lottery gaming facility manager or racetrack gaming facility manager would be allowed to contract
with one additional interactive sports wagering platform. All sports wagers, including wagers
accepted on the interactive sports wagering platform, would only be accepted from individuals that
are physically located in the State of Kansas. Interactive sports wagering platforms would be
allowed to offer all types of sports wagering, including in-game betting.
A sports governing board would be allowed to notify the Kansas Lottery that it desires to
restrict, limit, or exclude wagering on its sporting events and the Kansas Lottery would review the
request and determine if the sports wagering should be restricted. The sports wagering manager
would be required to use reasonable methods to prohibit the manager, directors, officers, owners,
employees, or relatives of those individuals living in the same household from placing wagers with
the manager or the interactive sports wagering platform. The bill would prohibit athletes, coaches,
referees, team owners, employees of a sports governing body or its member teams, and player and
referee union personnel from placing wagers on any sporting event overseen by that governing
body. The bill would prohibit any person with access to nonpublic confidential information held
by the manager from placing any wagers with the manager. No person would be allowed to place
a wager as an agent or proxy of another person. The sports wagering manager would not be
allowed to accept a wager from a person convicted of any felony or misdemeanor offense involving
sports wagering.
Sports wagering managers would be required to cooperate with investigations by the
Kansas Lottery, Kansas Racing and Gaming Commission, sports governing bodies, or law
enforcement agencies by providing account-level betting information and audio or video files
relating to persons placing wagers. Sports wagering managers would be required to immediately
report to the Kansas Lottery and the Kansas Racing and Gaming Commission any criminal or
disciplinary proceedings; abnormal wagering activity or patterns that may indicate a concern with
The Honorable John Barker, Chairperson
Page 3—HB 2199
the integrity of a sporting event or events; any potential breach of the relevant sports governing
body’s internal rules and codes of conduct pertaining to sports wagering; any conduct that corrupts
a betting outcome of a sporting event for purposes of financial gain, including match fixing; and
any suspicious or illegal wagering activity including the use of funds derived from illegal activity,
using other individuals to place wagers, or the use of a false identification when placing a wager.
The sports wagering manager would be required to maintain the security of wagering data,
customer data, and other confidential information from unauthorized access and distribution. The
Legislature would be required to review the confidential information provision before it expires
on July 1, 2026.
The sports wagering manager could use any data source to determine the result of a sports
wager that is determined by the final score or final outcome of a sports event for a wager placed
before the start of a sports event. For all other sports wagering, the sports wagering operator would
be required to purchase official league data to determine the outcome of that wager. The sports
wagering manager would be required to maintain records on all sports wagering activity for at
least three years after the conclusion of the sporting event. The sports wagering manager would
be required to allow the inspection of sports wagering records upon request of the Kansas Lottery,
the Kansas Racing and Gaming Commission, or by a court order. The sports governing body
would be able to receive certain real-time sports wagering information if they notify the Kansas
Racing and Gaming Commission, except they would not be able to receive any personally
identifiable information unless the sports governing body has entered into a data sharing agreement
with the Kansas Lottery. The bill would allow the state or sports governing body to have a civil
case to recover damages or other equitable relief against any person who knowingly engages in,
facilitates, or conceals conduct that intends to improperly influence a betting outcome of a sporting
event for purposes of financial gain. The sports wagering manager would be required to prohibit
an individual from placing a wager if the individual enrolls in the voluntary exclusion program.
The bill would create a class A nonperson misdemeanor if any of the following individuals
place a sports wager with a sports wagering retailer, lottery gaming facility manager, or racetrack
gaming facility manager:
1. Executive Director of the Kansas Lottery, a member of the Kansas Lottery Commission or
any employee or agent of the Kansas Lottery;
2. Executive Director, a member, or any employee or agent of the Kansas Racing and Gaming
Commission;
3. Sports wagering manager, or any director, officer, owner or employee of such sports
wagering manager, or any relative living in the same household with those persons;
4, An interactive sports wagering platform, or any director, officer, owner or employee of
such platform, or any relative living in the same household with those persons;
5. Any director, officer, or employee of a sports governing body;
6. Any owner, officer, athlete, coach or other employee of a team; or
7. Any director, officer, or employee of a player union or referee union.
The Honorable John Barker, Chairperson
Page 4—HB 2199
The bill would create a new crime of misuse of nonpublic sports information that is
punishable as severity level 5 nonperson felony. Misuse of nonpublic sports information is defined
as placing, or causing to be placed, a bet or wager on a sports contest on the basis of material
nonpublic information. The bill would set the penalty for sports bribery offenses with the intent
to influence a betting outcome of a sports contest in order to obtain financial gain as a severity
level 5 nonperson felony. It would be a severity level 8 nonperson felony for any person knowingly
to place a sports wager with access to nonpublic confidential information held by the sports
wagering manager; as an agent or proxy for other persons; using funds derived from illegal
activity; to conceal money derived from illegal activity; through the use of other individuals to
place wagers as part of any wagering scheme to circumvent any provision of federal or state law;
or using false identification to facilitate the placement of the wager or the collection of any prize
in violation of federal or state law.
The bill would create the Sports Wagering Receipts Fund in the State Treasury and separate
accounts would be maintained for the receipt of moneys from sports wagering conducted by each
sports wagering retailer, lottery gaming facility manager, or racetrack gaming facility manager.
The contract with the sports wagering retailer would determine the amount of sports wagering
revenues that would be distributed to the Lottery Operating Fund. If a lottery gaming facility
manager offers sports wagering, then the management contract would include a provision that 14.0
percent of the sports wagering revenues received from wagers placed in person at each lottery
gaming facility and 20.0 percent of the sports wagering revenues received from wagers placed
with the interactive sports wagering platform contracted with the lottery gaming facility manager
or racetrack gaming facility manager would be distributed to the Lottery Operating Fund. Sports
wagering revenues are defined as total revenues from sports wagering excluding voiding tickets
and after all prize related payments are made. If a lottery gaming facility manager or racetrack
gaming facility manager agrees to offer sports wagering, the Kansas Lottery would be the licensee
and owner of all software programs used in offering sports wagering. All sports wagering would
be under the control of the Kansas Lottery in accordance with the Kansas Expanded Lottery Act.
The bill would create the White Collar Crime Fund in the State Treasury that would be
administered by the Attorney General. The White Collar Crime Fund would be used to investigate
and prosecute criminal offenses involving the use of funds derived from illegal activity to make
wagers; placing wagers to conceal money derived from illegal activity; the use of other individuals
to place wagers as part of any wagering scheme to circumvent any provision of federal or state
law; the use of false identification to facilitate the placement of any wager or the collection of any
prize in violation of federal or state law; any other unlawful activity involving or facilitated by the
placing of wagers; or any other violation of the Kansas Expanded Lottery Act. The fund could
also be used to investigate and prosecute criminal offenses involving any financial or economic
crime. The Attorney General is authorized to transfer monies from White Collar Crime Fund to
any special revenue fund of the Kansas Bureau of Investigation to carry out the purposes of this
fund. Beginning on July 1, 2022, and each July 1st thereafter, the first $750,000 credited to the
Lottery Operating Fund from sports wagering revenue would be transferred to the White Collar
Crime Fund.
The bill would allow the Attorney General to file a legal action with the Kansas Supreme
Court within 90 days of the effective date of the bill to determine if allowing sports wagering
violates the Kansas Expanded Lottery Act provision that prohibits the state from designating other
The Honorable John Barker, Chairperson
Page 5—HB 2199
areas of the state where the operation of gaming facilities or similar gaming facilities until July 1,
2032. If the state violates this provision, it would be required to repay the privilege fee, with
interest, to each lottery gaming facility manager and racetrack gaming facility manager.
Mirroring state and federal law, the bill would require that if a federally recognized Indian
tribe submits a request to negotiate a gaming compact regarding sports wagering, then the
Governor is required to negotiate in good faith to enter into a gaming compact that would allow
sports wagering at tribal gaming facilities operated by the Iowa Tribe of Kansas and Nebraska, the
Kickapoo Tribe of Indians of the Kickapoo Reservation in Kansas, the Prairie Band Potawatomi
Nation in Kansas, or the Sac and Fox Nation of Missouri in Kansas and Nebraska.
The bill would require the Kansas Racing and Gaming Commission to establish
certification requirements and enforcement procedures for employees of a lottery gaming facility
manager or racetrack gaming facility manager who are directly involved in the operation or
management of sports wagering. The certification requirements and enforcement procedures
would also apply to persons that have a contract with a lottery gaming facility manager or a
racetrack gaming facility manager for providing goods or services related to sports wagering. The
certification requirements would include compliance with security, fitness, and background
investigations. The Kansas Racing and Gaming Commission would be required to adopt rules and
regulations providing for the suspension, revocation, or nonrenewal of an interactive sports
wagering license for certain violations.
The bill would prohibit any person from serving as the Executive Director, a member of
the Kansas Lottery Commission, or an employee of the Kansas Lottery while or within five years
after holding a financial interest, being employed by, or acting as a consultant to any interactive
sports wagering platform. It would also be illegal for these individuals to accept any
compensation, gift, loan, entertainment, favor, or service from any interactive sports wagering
platform, and any violation of this provision could be punishable as a class A misdemeanor.
The Kansas Lottery and Kansas Racing and Gaming Commission would have the authority
to write rules and regulations to implement the bill. Specifically, the Kansas Lottery would be
required to adopt rules and regulations regarding sports wagering advertising by January 1, 2022.
The bill includes definitions of “interactive sports wagering platform,” “marketing agreement,”
“match-fixing,” “official league data,” “primary facility,” “professional sports team,” “sports
governing body,” “sporting event,” “sports wagering,” “sports wagering manager,” “sports
wagering retailer,” “sports wagering revenue,” “tier one sports wager,” “tier two sports wager,”
and “wager.” Sports wagering would not include parimutuel wagering or fantasy sports leagues.
Under current law, the Kansas Lottery is prohibited from selling lottery tickets by
electronic mail, the internet, or telephone. The bill would remove this restriction as long as the
lottery ticket or any related online game does not functionally op