Topeka Just as the NCAA men's basketball tournament is getting underway, Kansas lawmakers on Tuesday took up the issue of legalizing sports betting in the state.
A House committee heard testimony Tuesday on House Bill 2752, the Kansas Sports Wagering Act, which would authorize the Kansas Lottery to conduct sports betting at each of the four state-owned casinos, as well as through online platforms that would enable people to make bets through their smartphones.
"It is tournament time, and I was amazed to read that several billion dollars are being bet on March Madness illegally in the United States," Rep. John Barker, R-Abilene, chairman of the House Federal and State Affairs Committee, said at the start of the hearing.
Currently, all but four states are prohibited under federal law from allowing sports gambling. The four states that are allowed to host it — Delawre, Montana, Nevada and Oregon — all had sports betting in place before the 1992 law was enacted.
But that federal law is currently being challenged at the U.S. Supreme Court, which heard oral arguments in December in a case involving New Jersey's attempt to legalize sports betting.
If the Kansas bill were to become law, it would not take effect unless the Supreme Court rules that all states are allowed to operate sports betting, a decision that is expected later this year.
During Tuesday's hearing, officials from the National Basketball Association and Major League Baseball said they took no position on whether Kansas should legalize sports betting. But if it does, they said there needs to be strict provisions to protect the integrity of their games.
"Major League Baseball has had a long history with sports betting," Bryan Seeley, MLB's senior vice president and deputy general counsel, told the committee. "We’ve had scandals. We’ve had Pete Rose. We’ve had the Black Sox scandal. It’s an issue that’s been at the forefront of our minds for a very long time."
Pete Rose is baseball's all-time leading hitter who played for the Cincinnati Reds and Philadelphia Phillies, but who was permanently banned from baseball in 1989 amid reports that he had bet on baseball games.
"Black Sox" is a reference to a 1919 scandal when players for the Chicago White Sox took payments from gambling bookies in exchange for deliberately throwing that year's World Series to the Reds.
Both Seeley and an NBA representative said their leagues have particular concerns about what types of bets would be allowed.
They said the leagues do not object to betting on the outcome of games, but they do object to certain specialized kinds of bets, such as whether the first pitch of a game is a ball or strike, or which player will draw the first foul, because those events are easily manipulated by players, umpires or referees.
The bill includes several provisions aimed at preventing tampering with games, including a prohibition on any players, coaches, umpires or referees from placing bets.
It also would levy a 1 percent "integrity fee" on all sports wagering. Money from those fees would be paid to each sport's governing body to help it defray the increased cost of investigating and enforcing its own league rules on gambling.
An official from the Kansas City Royals submitted written testimony saying those provisions satisfied the team's concerns about legalizing sports betting in Kansas.
But officials from each of the state's four casinos argued against imposing the 1 percent integrity fee, saying there is only a slim profit margin on sports wagering and that such a fee would cut deeply into that margin.
Whitney Damron, a lobbyist who represents the company hired to operate the Hollywood Casino in Kansas City, Kan., also said he would rather see sports betting confined to the "bricks-and-mortar" casinos that are owned by the Kansas Lottery and to parimutuel race tracks if any should reopen, with no option for online wagering with smartphone apps.
"We don't see this as a big moneymaker for either the state of Kansas, the casinos or the parimutuel tracks," Damron said. "It's another amenity that we have customers who would like to participate in. And certainly right now, as the NCAA tournament begins, people are very fascinated by that."
State budget officials said they could not estimate how much additional revenue the state might receive through legalized sports wagering.
The committee took no action on the bill Tuesday but could begin debating it and considering amendments at any time.