Passage of Missouri sports betting amendment will squeeze Kansas gaming revenue

Adam Proffitt, the budget director under Gov. Laura Kelly, said during an economic outlook conference at Washburn University that passage of a Missouri constitutional amendment legalizing sports wagering would reduce Kansas' gambling revenue once Missouri residents in the Kansas City area had an alternative to driving across the state line to place online bets. (Sherman Smith/Kansas Reflector)

TOPEKA — The Kansas budget director said Thursday passage of a proposed Missouri constitutional amendment in November allowing legal sports wagering would cut into Kansas’ gaming tax revenue.

Adam Proffitt, who serves as secretary of the Kansas Department of Administration and as budget director under Gov. Laura Kelly, said adoption of the Missouri amendment would carve into cross-border betting by Missouri residents. He didn’t offer an estimate of the revenue shift.

“I would be naive to say that it wouldn’t have any impact,” Proffitt said during an economic outlook conference at Washburn University. “We’d like to keep that money in Kansas.”

Under Kansas law, people placing the bets must be present in Kansas even if making the wager through an online platform through DraftKings, FanDuel, BetMGM, ESPN BET, Fanatics or Caesars.

“I live in the Kansas City metro and on some Sunday mornings about 11:30, if I drive toward State Line (Road), there’s a host of cars literally lined up on the Kansas side — they’re on their phones placing bets on football games,” Proffitt said.

On Sept. 1, 2022, Kelly placed the first legal sports bet in Kansas. She wagered $15 — to match quarterback Patrick Mahomes’ jersey number — on the Kansas City Chiefs winning Super Bowl LVII. On Feb. 12, 2023, Kelly proved herself an adept sports gambler. The Chiefs defeated the Philadelphia Eagles for the championship, and the governor won $150.

In nearly two years of government-sanctioned sports wagering in Kansas, the state has drawn $18.2 million in tax revenue. Tax in Kansas during August was $657,000, an increase from $484,000 in August 2023.

Gambling platforms authorized to operate in Kansas have documented revenue of $182 million on $4.1 billion in wagering since launching in 2022.

Proponents of Missouri Amendment 2 released an economic study indicating total tax revenue in the state would total $4.7 million in the initial year of operation, but grow to $38.7 million in the fifth year.

Missouri voters will decide the sports betting constitutional initiative Nov. 5. If approved, Missouri regulators would be directed to set up a sports gambling network by December 2024.

Overall, Proffitt said the state general fund in the current fiscal year had authorized expenditures of $10.5 billion on forecasted revenue of $9.7 billion. The state’s cash reserves would cushion that spending hit, he said.

“So, we’re spending more than we take in,” he said. “Really critical to note, we had a lot of one-time projects scheduled. We have a strong ending balance.”