Kansas Starts Discussions on Sports Betting Regulations

The introduction of sports betting regulations appears to be a hot topic in the US as of late, with a number of states looking to authorize the provision of these services within their borders. The latest state to jump on the sports-betting bandwagon is Kansas where lawmakers are presently discussing the possibility of introducing proper regulations to the Sunflower State.

The Kansas Federal and State Affairs Committee gathered for a hearing yesterday to start discussions on a piece of legislation which, if approved, will enable the Kansas Lottery to provide betting on sporting events in the four gambling establishments, owned by the state.

Bets over the internet and via mobile applications also would be allowed if the legislation passes. During yesterday’s hearing, stakeholders also expressed their stance on the issue in an effort to move forward with shaping the new piece of legislation.

The bill the legislators discussed yesterday is dubbed H 2752 and aims at legalizing sports betting, provided that the Supreme Court overturns the federal ban that is currently imposed on this type of betting activities in all states but Montana, Delaware, Oregon, and Nevada.

The hearing commenced with a thorough discussion of the legal hurdles regulated sports betting in Kansas is currently facing, PASPA (the Professional and Amateur Sports Protection Act, enforced in 1992) being the main barrier. The US leagues’ crusade to preserve the integrity of sports in a regulated market also plays a substantial role in the shaping of H 2752.

The bill takes into consideration the proposal of major leagues like the MLB and the NBA of what they call an “integrity fee”, amounting to 1% of all bets made on their sporting events. It should be noted the said fee would be imposed on the sports betting providers’ handle and not on their revenue. What this means is the leagues insist on collecting the above-specified percentage from all bets that are placed on their events. This means roughly 20% of the sports betting revenue would go to the leagues.

Not Everyone Approves of Authorizing Sports Betting

While sports betting regulations could help bring in more to the state’s coffers, not everyone agrees with the passing of H 2752. The Senior Vice President of the MLB Bryan Seeley was also present at yesterday’s hearing in Kansas to testify on the league’s behalf. Seeley explained that in general the MLB does not support the idea of introducing sports betting but if the state legalizes it, the league should be allowed to protect its interests how it deems fit.

MLB’s Senior Vice President also said the league deserves a cut from the profits generated from sports betting via mobile devices. Another condition Seeley laid out was for the gambling operators to share information on their sports betting services with the league so that suspicious or illegal activities can be tracked down if they occur. According to Seeley, such activities pose a serious threat to the integrity of baseball.

It is not currently clear how much the state lottery in Kansas would collect from legal sports betting but according to estimates of the American Gaming Association, Kansans are spending as much as $1.3 billion on unauthorized sports wagers on an annual basis.

However, the leagues are not the only ones to take the legalization of sports betting with a grain of salt. Another person to express their stance on sports betting at the hearing was Whitney Damron, who is a representative of Hollywood Casino, one of the four state-owned gambling venues in Kansas.

Mr. Damron argued against the provision of sports betting services online or via mobile applications. According to him, these services should not be allowed because they would have a negative impact on what he called the “foot traffic” at brick-and-mortar gambling establishments like the Hollywood Casino.

Mr. Damron spoke against the idea of betting operators being forced to contribute with a cut of their handle to the US leagues. He believes the 1% cut demanded by the leagues is way too high, even more so if one considers the narrow profit margins on sports betting.

He also specified that an integrity fee is not imposed in most of the other jurisdictions where sports betting is regulated. Why should it be introduced in Kansas, he argued. He suggested that the interest regulated sports betting would attract is a sufficient reward for the leagues since they will profit from advertising as well as from the increased number of viewers behind the television screens.

Meanwhile, Mr. Matthew Bergmann spoke on behalf of two of the other state-owned casinos and for the most part agreed with the stance of Mr. Damron. Bergmann is against the “data monopoly” the leagues demand and noted that their data sources should not be the only ones to deploy when sports bets are settled. Mr. Bergmann concluded by saying that sporting events statistics are generally not considered to be intellectual or copyrighted property.