Kansas casino sues state days after sports betting legalized
May 14, 2022
The Kansas Star Casino filed a lawsuit against the state of Kansas just days after sports betting was legalized in the state. The issue arises from an unrelated provision of the sports betting law, which has the potential to resurrect businesses such as the now-closed Wichita Greyhound Park.
Democratic Governor Laura Kelly signed legislation passed with bipartisan support by the Republican-controlled legislature. The new law will permit people in the state to bet on sporting events and place bets at each of the state's four casinos or up to 50 other locations picked by each casino. Fantasy sports betting was already legal.
Kelly's signature on the sports betting legislation emerged four years after the United States Supreme Court overturned a federal ban on sports betting in most states in 2018.
The new law also allocates the majority of the state's portion of new gambling revenue, approximately $5 million per year, to initiatives to entice the Kansas City Chiefs from Missouri to Kansas.
Lawsuit by Kansas Star Casino
Kansas Star Casino filed the lawsuit in Shawnee County District Court in Topeka, the state capital. The casino, which is located about 15 miles south of Wichita, is operated by Boyd Gaming. It is currently under a contract with the Kansas Lottery that expires in December 2026.
“Boyd has lived up to its obligations, successfully operated the Kansas Star and invested hundreds of millions of dollars in Kansas Star based on the State’s contractual promise,” the Las Vegas-based company said in a statement.
However, Boyd stated that it is in favor of legalized sports betting in Kansas. The company is attempting to compel the state to pay a $25 million penalty, plus interest, mentioned in the contract, despite the fact that the law states that the dog park will reimburse Kansas if it receives its new gambling devices.
Breach of contract
The casino claims the state is in violation of its contract, which states that the lottery will not allow competition from similar arrangements in the Wichita area. The conflict is over a provision that allows new gambling machines at Wichita Greyhound Park. The dog park first opened in 1989, over two decades before the casino, but it was financially strapped and forced to close in 2007. The casino first opened its doors in 2011.
The devices in question are renowned as historic horse racing machines, and the new law enables 1,000 of them to be used in the park.
The machines replay snippets of previous horse races, with the results deciding what a bettor wins, and the new law refers to them as machines for betting on races rather than slots. However, they resemble slot machines, and Boyd claims that the two kinds of devices are "indistinguishable," and therefore, the state cannot allow the dog park to own them.
Stephen Durrell, Executive Director of Kansas Lottery, stated that he was unaware of the lawsuit. State Rep. John Barker, an Abilene Republican who was involved in the final version of the law, on the other hand, stated that there is disagreement as to whether the historic horse racing machines are slots and. Additionally, he added that "we will not know for sure," at least until the Kansas Supreme Court decides.