LJWorld.com / Court ponders gambling law

Business

May 15, 2008

Topeka — With hundreds of millions of dollars riding on the outcome, the Kansas Supreme Court on Wednesday considered whether the new gambling law complied with the constitutional requirement that casinos be state-owned and operated.

Deputy Attorney General Michael Leitch depicted the law as a sham to circumvent the Kansas Constitution. “Our constitution is not a semantic roadblock that the Legislature can avoid with a pocket thesaurus,” Leitch said.

But attorney Dan Biles, defending the Kansas Lottery, which would oversee new casinos, said under the 2007 law, the state would indeed be the owner and operator of the casinos and racetrack slot machines, and in control of the games.

“This is a creature of the state,” Biles said.

Justices on the seven-member court asked numerous questions but took no action. The court could rule at any time, but the next official date for opinions is June 27.

Major casino operators are lining up to try to secure rights to build four resort-style casinos in Kansas, including one in Wyandotte County.

Kansas legislators also recently approved a state budget depending on millions of future dollars in new gambling revenue to back several projects, including bonds for expansion of the Kansas University School of Pharmacy.

The main question surrounds a constitutional amendment approved by voters in 1986, which established the Kansas Lottery, that gambling ventures in the state must be state-owned and operated.

Under the new casino law, the state will sign contracts with casino management companies that will operate the facilities.

Leitch said that fails the standard of state ownership. The state will have no financial risk and none of the employees running the games will be state employees, he argued.

“Not only does the state not own anything, but it’s not operating anything,” he said.

But several justices said the state exercises ownership by awarding the right to build casinos.

“There are other instances in which ownership is not as dictionary literal as you are arguing,” Justice Lee Johnson said.