A little more than a year ago, gambling proponents in Kansas were feeling lucky.

After more than a decade of failure, they pushed through a bill to establish four top-flight casinos and put thousands of slot machines in pari-mutuel tracks.

Ka-ching. Tens of millions of dollars were going to pour into state coffers, according to gambling supporters.

In January, Gov. Kathleen Sebelius banked on approximately $80 million in gaming dollars to fund some of her budget proposals.

But are dreams of a jackpot now bust?

The Woodlands horse and dog track in Kansas City, Kan., said it would shut down Aug. 24 after having failed to reach a deal with the Kansas Lottery for 800 slot machines.

“It’s not good news by any means,” said Lottery Director Ed Van Petten. “We’re keeping an open dialogue, and they’ve been good to negotiate with, but at this point we’ve done all we can.”

And The Woodlands was the last chance for slots at tracks in Kansas. Sedgwick County voters last year rejected slots at Wichita Greyhound Park, which has closed, and Camptown Greyhound Park in Frontenac has been closed since 2000 and broke off negotiations with the Lottery earlier this year.

Meanwhile, on the same day The Woodlands made its announcement, a major Las Vegas casino operator withdrew its bid to build a $750 million casino and hotel in Wyandotte County.

Las Vegas Sands Corp. said it would no longer pursue a gambling license for a state-owned casino, in part because neighboring Missouri may lift its $500 per gambler loss limit in its so-called riverboat casinos. If the limit is removed, that would give gamblers less reason to go to a casino in Kansas.

Four other companies remain in contention to build a casino in Wyandotte County, and officials are expected to select an operator in September.

But nationally, gambling is taking a beating because of record food and gasoline prices.

Las Vegas Strip revenue fell 16 percent in May, which was the fifth straight month of decline in the nation’s biggest casino center. And No. 2 Atlantic City saw revenue drop 11 percent in June, which was the 13th decrease in 15 months. Stocks in major casino companies have fallen precipitously.

“Travel is more expensive,” said Van Petten. “The entertainment dollar is not as readily available as it was a year ago.”

For the state, the loss of The Woodlands, owned by Grace Cos. of St. Joseph, Mo., could be a big deal.

Slumping tax revenue has already prompted Sebelius to request state agencies cut up to 2 percent in their budget proposals; universities have been asked to cut 7 percent over two years.

In April, state budget experts estimated that slots at the tracks would produce more than $27 million in revenue for the fiscal year that started July 1.

Now that appears to be gone with the closing of The Woodlands, which had opened in 1989. Still, the state is expected to reap $80 million in privilege fees once it approves the four state-owned casino operators.

Sebelius’ spokeswoman, Nicole Corcoran, said the governor was disappointed in the news about The Woodlands “and intends to reach out to the owners to see if there are any further options to closing the track that can be explored.”

Under state law, 40 percent of revenues from slots goes to the state, 25 percent to the track and 20 percent to local government. The other 15 percent is negotiable. Van Petten said the state was willing to give The Woodlands that 15 percent, but track officials still didn’t think they could make enough to cover expenses and make a profit.

The law may give the state too large of a cut, Van Petten said. When the bill was being worked in the Legislature in 2007, the state’s share looked “workable,” he said, but now it may be too much.