Kansas Governor Signs Chiefs, Royals Plan Using Sports Betting Revenue

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Kansas sports betting

Kansas sports betting revenue will soon aid a campaign to lure Kansas City sports teams over the Missouri border. 

Gov. Laura Kelly signed HB 2001 Friday to allow Sales Tax and Revenue (STAR) Bonds to make up 70% of new stadium costs, using existing tax streams including Kansas sports betting, to pay them back in hopes of attracting Kansas City teams to the state. The Kansas legislature approved the bill during a special one-day session Tuesday, 84-38 in the House and 27-8 in the Senate, and the legislation goes into effect July 1

The stadiums for the Kansas City Chiefs and Kansas City Royals are leased until January 2031. The teams are exploring options for their venues but Missouri officials and voters have yet to support any plans.

“We know that modernizing our economic development tools provides the opportunity to increase private investment into the state,” Kelly said in a statement. “By modifying the STAR Bonds program, one of our strongest economic development mechanisms, lawmakers crafted a viable option for attracting professional sports teams to Kansas.”

Kansas sports betting revenue key

The state would have 30 years to pay off any bonds tied to stadiums. Lawmakers decided the state could use revenues from sports betting, state lottery sales, and new sales and alcohol taxes generated in new entertainment districts created by the stadium. Kansas typically allows funding up to 50% of projects and 20-year terms for its STAR bonds.

The Kansas City Star reported estimates that the stadiums could be at least $2 billion for the Chiefs and $1.5 billion for the Royals. The legislation does not name the Chiefs or Royals, but limits its scope to stadiums for NFL or MLB teams in a state adjacent to Kansas.

As the initial Kansas legislative session ended in May, Kelly called the special session Tuesday to consider tax cuts.

New Kansas plan has existing fund

As lawmakers worked to legalize sports betting in 2022, the legislation also set up the Attracting Professional Sports to Kansas Fund. The law sends 80% of sports betting tax revenue to the fund after allocations to the White Collar Crime Fund based on the governor’s request.

Since its launch in September 2022, Kansas has generated $16.6 million in tax revenue from sports betting.

The fund received $3.3 million in Fiscal Year 2023 and $4 million in Fiscal Year 2024, according to a legislative fiscal note.

Missouri takes a back seat

Earlier this year, voters on the Missouri side of Kansas City decided against using sales taxes to fund the teams’s efforts to remain in Kansas City. The Chiefs proposed an $800 million renovation to Arrowhead Stadium, while the Royals planned a $2 billion stadium in downtown Kansas City, Missouri.

Officials from the Chiefs and Royals have said they will consider Kansas options, according to the Associated Press. They have floated the idea in the past, as well.

Kansas City, Missouri Mayor Quinton Lucas, however, said during a news conference he will “lay out a good offer” to the teams.

“Today was largely, in my opinion, about leverage,” Lucas said. “And the teams are in an exceptional leverage position.”

Photo by AP/Colin E. Braley