Kansas legalized sports betting in 2022 under the Kansas Expanded Lottery Act, following the U.S. Supreme Court’s 2018 decision to strike down the Professional and Amateur Sports Protection Act (PASPA).
This allowed states to regulate sports wagering independently. Since its launch, Kansas’s sports betting market has grown steadily, with six major operators; BetMGM, Caesars, DraftKings, Fanatics, FanDuel, and ESPN BET; generating significant revenue.
The market’s success has been driven by a competitive model, with operators offering online and retail betting options. DraftKings has led the market, accounting for a significant share of the handle, while others like FanDuel and ESPN BET have also carved out substantial niches. However, this growth has not been without controversy, as some lawmakers have expressed concerns about gambling addiction, regulatory oversight, and the state’s reliance on betting revenue.
The Budget Provision: What Happened?
On April 11, 2025, the Kansas House of Representatives approved a budget amendment to SB 125, the state’s comprehensive budget bill, on the final day of the legislative session. The amendment, which caught many by surprise, prohibits the Kansas Lottery from spending funds or entering negotiations to renew sportsbook operator licenses for the next two fiscal years, effectively until June 30, 2026. This provision overrides a veto by Democratic Governor Laura Kelly, who had previously rejected similar measures, arguing they threatened a successful industry.
The vote to override Kelly’s veto was contentious. The Republican-controlled House and Senate pushed the provision through, with the House narrowly securing the necessary votes on April 11 after failing the previous day. The amendment does not immediately halt sports betting, as current licenses for the six operators are valid until August 31, 2027. However, it signals a potential end to the current market structure, as the state is barred from extending or renegotiating contracts in the interim.
Immediate Reactions and Industry Response
The approval of the budget provision sent shockwaves through the sports betting industry. Operators, bettors, and industry advocates expressed outrage and confusion, with some labeling the move as “reckless” and “disastrous.” Jeremy Kudon, president of the Sports Betting Alliance, took to social media to clarify that Kansas’s sportsbooks would not “go dark” immediately, emphasizing that contracts extend into 2027. However, he acknowledged the uncertainty surrounding the state’s long-term commitment to legal betting.
Just want to clarify: None of the leading OSB operators in Kansas will go dark as a result of today’s vote. Most contracts with the lottery run well into 2027.
— Jeremy Kudon (@JKudon) April 11, 2025
Posts on X reflected a mix of alarm and cautious optimism. Some users speculated that the provision could lead to a complete shutdown of the market, while others suggested lawmakers might be planning to overhaul the regulatory framework. Industry analysts noted that the amendment creates a “wait-and-see” period, leaving operators uncertain about their future investments in Kansas.
Economic Implications
Tax Revenue at Risk
Kansas’s sports betting market has been a reliable source of state revenue, with a 10% tax on operator income. In February 2025, the market generated $23.9 million in revenue, and March’s $8 million contributed significantly to state coffers. If the market were to shut down after 2027, or if operators scale back operations due to uncertainty, Kansas could lose millions in annual tax revenue. This loss would impact public services, including education and infrastructure, which benefit from lottery and gaming funds.
Job Creation and Local Economies
Sports betting has supported jobs in Kansas, from casino staff to marketing and tech roles within betting companies. Retail betting locations, often tied to casinos like Kansas Crossing, have boosted local economies in areas like Pittsburg. A potential market contraction could lead to layoffs and reduced economic activity, particularly in communities reliant on casino tourism.
Operator Investments
The uncertainty introduced by the budget provision may deter operators from investing in Kansas. DraftKings, which reported $88.8 million in handle in February 2025, and FanDuel, with $68.1 million, have significant infrastructure in the state. If licenses are not renewed, these companies may redirect resources to other states, such as Oklahoma or Missouri, where sports betting legislation is gaining traction.
Regulatory Dynamics: What’s Behind the Move?
Political Motivations
The budget provision reflects deeper political divisions in Kansas. Some Republican lawmakers, particularly those with conservative constituencies, have long opposed gambling expansion, citing moral concerns and the risk of addiction. The amendment may be an attempt to curb the growth of sports betting or force a reevaluation of the 2022 legalization bill. Governor Kelly’s veto override highlights tensions between the executive and legislative branches, with Republicans leveraging their supermajority to push through controversial measures.
Potential Regulatory Changes
Analysts speculate that the provision could be a precursor to significant regulatory changes. Lawmakers may be considering:
- Higher Taxes: Increasing the tax rate on sports betting revenue to generate more state income.
- Market Consolidation: Limiting the number of operators to create a less competitive market, potentially favoring one or two dominant players.
- New Licensing Framework: Introducing a new bidding process or criteria for licenses, possibly prioritizing local operators or those with stronger community ties.
- Stricter Oversight: Implementing tougher regulations to address gambling addiction and protect consumers.
These changes could reshape the market, but they also risk alienating bettors and operators who value the current competitive model.
Social and Cultural Impacts
Gambling Addiction Concerns
Critics of sports betting argue that its accessibility, particularly through mobile apps, exacerbates gambling addiction. Kansas has seen increased calls to problem gambling hotlines since 2022, prompting some lawmakers to question the social costs of the industry. The budget provision may reflect a desire to pause and assess these impacts before committing to long-term licenses.
Public Sentiment
Public opinion in Kansas is divided. Polls conducted in 2024 showed strong support for legal sports betting, with many residents appreciating the convenience and entertainment value. However, rural and conservative communities remain skeptical, viewing gambling as a vice. The budget provision may deepen this divide, with urban bettors feeling targeted by restrictive policies.
Comparative Analysis: Kansas vs. Other States
Kansas’s situation is unique but not isolated. Other states have grappled with sports betting regulation:
- Hawaii: In April 2025, Hawaii’s Senate passed HB1308 to legalize sports betting, but it faces opposition in the House. Unlike Kansas, Hawaii is expanding rather than restricting its market.
- New Jersey: Governor Phil Murphy proposed a tax hike on sports betting operators in 2026, but it lacks legislative support. New Jersey’s market remains robust, contrasting with Kansas’s uncertain future.
- Oklahoma: Efforts to legalize sports betting continue, with Governor Kevin Stitt supporting a free-market approach. Kansas’s potential retreat could make Oklahoma a regional betting hub.
Kansas risks becoming the first state to dismantle a legalized sports betting market, a move that could set a precedent for others with similar concerns.
Long-Term Scenarios
Scenario 1: Market Shutdown
If lawmakers maintain the prohibition on license renewals, Kansas’s sports betting market could cease operations after August 31, 2027. This would force bettors to turn to illegal offshore platforms, reducing state oversight and revenue. The black market could thrive, posing risks to consumer protection and increasing gambling-related harms.
Scenario 2: Regulatory Overhaul
Lawmakers could use the two-year window to craft a new sports betting framework. This might involve higher taxes, fewer operators, or stricter advertising rules. While this could stabilize the market, it risks alienating major players like DraftKings and FanDuel, who may exit if conditions become unfavorable.
Scenario 3: Reversal of Policy
Public pressure or lobbying from the betting industry could lead to a reversal of the provision before 2026. Governor Kelly, a supporter of the 2022 legalization, may push for compromise legislation to preserve the market. This scenario would require bipartisan cooperation, which has been elusive in recent sessions.
Stakeholder Perspectives
- Operators: Companies like DraftKings and FanDuel are likely to lobby aggressively to protect their market share. They may argue that the provision threatens jobs and innovation.
- Bettors: Kansas bettors, particularly younger demographics, value the convenience of mobile betting. A market shutdown would push them to unregulated platforms or neighboring states.
- Lawmakers: Republicans backing the provision see it as a way to assert control over gambling policy, while Democrats like Kelly view it as a threat to economic progress.
- Casinos: Kansas’s four state-licensed casinos, which partner with sportsbooks, face uncertainty. A market collapse could reduce foot traffic and revenue.
Broader Implications for the Gambling Industry
The Kansas situation underscores the fragility of state-level gambling policies. As more states legalize sports betting, they must balance revenue generation with social responsibility. Kansas’s potential retreat could embolden anti-gambling advocates elsewhere, slowing the national expansion of legal betting. Conversely, it may prompt operators to diversify into emerging markets like esports betting or micro-betting to offset losses.
The approval of the budget provision in SB 125 has thrown Kansas’s sports betting market into disarray, raising questions about its long-term viability. While the immediate impact is limited; bettors can wager until at least 2027; the prohibition on license renewals creates a cloud of uncertainty. Economic losses, regulatory shifts, and social concerns will shape the debate in the coming years. Kansas stands at a crossroads: it can preserve a thriving industry, overhaul it to address criticisms, or risk becoming a cautionary tale in the history of American sports betting.
Recommendations
- Stakeholder Dialogue: Lawmakers should engage operators, bettors, and casinos to understand the market’s value and challenges.
- Impact Assessment: Conduct a comprehensive study on the economic and social effects of sports betting to inform future policies.
- Consumer Protections: Strengthen problem gambling resources, such as hotlines and treatment programs, to address critics’ concerns.
- Transparency: Clarify the intent behind the provision to reduce speculation and restore confidence in the market.
The next two years will be critical for Kansas as it navigates this unprecedented shakeup. The decisions made will reverberate beyond state lines, influencing the broader trajectory of sports betting in the U.S.