Topeka — A district judge said he would decide by the end of January whether the state's expanded gambling law is constitutional, the first step toward getting a final answer from the Kansas Supreme Court.
At issue is the law enacted by the Legislature this year allowing four state-owned and operated resort casinos, plus slot machines at horse and dog tracks. Attorney General Paul Morrison maintains the law is unconstitutional, while the Kansas Lottery says there's nothing wrong with it.
Shawnee County District Judge Charles Andrews said Tuesday he would issue his ruling before civil trials start in his courtroom in February. But the issue won't stop with him.
Whoever loses will appeal to the state's highest court, which is what Morrison wanted in the first place.
As requested by the governor, Morrison challenged the law to create a legal controversy for the court to settle. He filed his lawsuit with the Supreme Court, which sent it to the district court because that is where the Legislature said any legal challenge had to start.
Gov. Kathleen Sebelius said the law is constitutional but wanted Morrison to get a definitive answer from the Supreme Court. She said developers would be reluctant to invest unless the law was upheld.
Eleven states have nontribal resort casinos, but Kansas would be the only one to own and operate casinos, according to the American Gaming Association.
Lawmakers specified that casinos are owned and operated by the Lottery, which contracts with casino developers to carry out the day-to-day management.
In 1986, voters rewrote the state constitution to say the Legislature may provide for a state-owned and operated lottery, which it did the following year. Then, in 1994, the Supreme Court ruled the term "lottery" was broad enough to cover slot machines and other casino games.
Deputy Attorney General Mike Leitch said that when voters approved the amendment, "You would be hard pressed to think voters thought they were approving black jack and craps."
The gambling law says those picked by the state to run the casinos must pay for the buildings and equipment, but the Lottery is the owner and operator. Leitch said the Lottery is regulating rather than operating.
Leitch said the constitution doesn't define the term "state-owned and operated," but the plain meaning is clear that "own" and "operate" aren't the same thing, while "operate" and "manage" do mean the same thing.
"The state has to own something, and nowhere in the bill does it show how that is done," he said. "There is no indication of how the ownership right moves to the state. These are just legislative decrees. They have no effect of transferring ownership."
Dan Biles, representing the Lottery, said the state does have ownership.
"When you look at Senate Bill 66, the court needs to look at the barriers to prevent the Lottery from exercising full control," Biles said. "What prohibits the Lottery from exercising whatever control is needed? Nothing."
Biles said a "lottery" long has been considered any game that includes consideration, prize and chance, and the constitution requires the Lottery to own and operate such games.
He said the law requires the Lottery to do such things as deciding who manages the casino, constantly monitoring the operation with the ability to shut down any slot machine whenever it wants and deciding the daily revenues and distribution.