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
March 22, 2022
The Honorable John Barker, Chairperson
House Committee on Federal and State Affairs
Statehouse, Room 346-S
Topeka, Kansas 66612
Dear Representative Barker:
SUBJECT: Fiscal Note for HB 2740 by House Committee on Federal and State Affairs
In accordance with KSA 75-3715a, the following fiscal note concerning HB 2740 is
respectfully submitted to your committee.
HB 2740 would allow the Kansas Lottery to enter into a contract with lottery gaming
facility managers 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 would be allowed to offer sports wagering in-person at their facility or
over the internet through websites and mobile device applications from up to three licensed
interactive sports wagering platforms approved by the Kansas Lottery. The bill would allow
lottery gaming facility managers to enter into marketing agreements with professional sports teams
for the purpose of marketing sports wagering at the teams’ 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
platforms at the primary facility. The marketing agreement would prohibit any owner, director,
officer, employee, or agent of the professional sports 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 be required to review and approve each interactive sports
wagering platform that would 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
that have entered into a management contract for the operation and management of sports wagering
The Honorable John Barker, Chairperson
Page 2—HB 2740
could use the interactive sports wagering platform. A lottery gaming facility manager would be
able to apply to the Kansas Lottery to provide one additional graphical user interface specific to a
professional sports team that they have a marketing agreement to provide sports wagering at the
team’s primary facility. 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.
The bill would require that any person that provide goods, services, software, or any other
components necessary for the determination of the odds or the outcomes of any wager on a sporting
event, directly or indirectly, to a lottery gaming facility manager apply to the Kansas Racing and
Gaming Commission for a sports wagering supplier license. The Commission would establish the
fee for the issuance and renewal of a sports wagering supplier license and provisional sports
wagering supplier license. The provisional sports wagering supplier license would be valid for a
term set by the Commission that cannot exceed one year. The sports wagering supplier license
would be valid for two years from the date issued.
The bill would allow each lottery gaming facility manager to enter into marketing
agreements with not more than 50 marketing entities with at least 10 agreements with nonprofit
fraternal or veterans’ organizations. The marketing agreement would be required to be approved
by the Kansas Lottery.
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, 2023.
The Kansas Lottery would be allowed to restrict, limit, or exclude wagering on one or more
sporting event by a notice to each lottery gaming facility manager. Offering or taking wagers that
are contrary to any notice or any rules and regulations would be a violation of the Kansas Expanded
Lottery Act.
The lottery gaming facility 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 manager would not be allowed to accept a wager from a person convicted of any felony or
misdemeanor offense involving sports wagering.
Lottery gaming facility managers would be required to cooperate with investigations by
the Kansas Lottery, Kansas Racing and Gaming Commission, or law enforcement agencies by
providing account-level betting information and audio or video files relating to persons placing
wagers. Managers would be required to immediately report to the Kansas Lottery and the Kansas
The Honorable John Barker, Chairperson
Page 3—HB 2740
Racing and Gaming Commission any criminal or disciplinary proceedings; abnormal wagering
activity or patterns that may indicate a concern with 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 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, 2027.
The lottery gaming facility manager could use any data source to determine the result of a
sports wager as long as the source provides certified league data approved by the Executive
Director of the Kanas Lottery. The 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 bill would allow the state 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 lottery 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. Lottery gaming facility 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 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
The Honorable John Barker, Chairperson
Page 4—HB 2740
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 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. Under current law, it is a severity level 9 nonperson felony to operate an illegal gaming device
not authorized by the Kansas Lottery. The bill would authorize the Attorney General and Kansas
Racing and Gaming Commission to investigate and prosecute violations of this provision.
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 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
lottery gaming facility manager. 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 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 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 Governor. 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. Beginning on July 1, 2023, 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 Attorney General and the Kansas Racing and Gaming Commission would be
required to make a request to the Governor before August 1st of each year for available funding
The Honorable John Barker, Chairperson
Page 5—HB 2740
from the White Collar Crime Fund. The Governor would be authorized to transfer monies from
White Collar Crime Fund to any special revenue fund of the Attorney General and the Kansas
Racing and Gaming Commission to carry out the purposes of this fund.
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 would be 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 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 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 a
certification for certain violations.
The bill would authorize the operation of up to 1,000 historical horse race machines at a
parimutuel horse racetrack located in Sedgwick County with machines approved by the Kansas
Racing and Gaming Commission. The parimutuel wagers placed on historical horse race machines
would not be dependent upon the type of breed that primarily races in live meets conducted or
simulcast races displayed at the racetrack. Historical horse race machines could be offered during
any times approved by the Commission and would not be limited to times when live or simulcast
races are being conducted. Historical horse race machines would randomly select one or more
races when the patron deposits a wager. The machine would not display any information that
would allow the patron to identify the historical horse race on which the patron is wagering before
the wager is made. The machine would display statistical racing information that would have been
available on the date the horse race actually occurred. The identity of the race would only be
revealed after the wager has been placed and played. Historical horse race machines would be
excluded from the definition of electronic gaming machines. No historical horse race machines
would be operated at any facility that conducts live greyhound races or displays simulcast
greyhound races. The total amount wagered on historical horse race machines would be subject
to the parimutuel tax at a rate of 3.0 percent.
Prior to the operation of any historical horse race machines, the Executive Director of the
Kansas Lottery would be required to provide a written notice to the lottery gaming facility manager
that has a facility located in the same gaming zone of the facility where the operation of any
historical horse race machines would occur. The bill would only allow the lottery gaming facility
manager in the same gaming zone to make a claim that the contract authorizing historical horse
race machines violates the law. The lottery gaming facility manager would have 60 days after the
notice to file a legal action at the Kansas Supreme Court to determine if the proposed contract with
The Honorable John Barker, Chairperson
Page 6—HB 2740
the parimutuel racetrack is in violation of the Kansas Expanded Lottery Act or creates a material
breach of the lottery gaming facility manager’s contract with the Kansas Lottery. Monetary
damages awarded could not exceed an amount equal to the privilege fee paid by the facility
manager plus accrued interest.
If the final judgment of the court orders the repayment of the privilege fees and interest to
a lottery gaming facility manager then the Kansas Racing and Gaming Commission would not
authorize the operation of historical horse race machines unless the Kansas Lottery received the
full judgment amount from the facility manager licensee for the racetrac