Kansas lawmakers created a pathway for Indian tribes to offer statewide Kansas online sports betting. But the pathway is blocked at the moment.
The Prairie Band Potawatomi Nation and Gov. Laura Kelly’s chief of staff asked for the change. The parties had been negotiating a compact amendment since Kansas sports wagering passed last year.
Kelly quickly signed the bill amending the sports betting law to allow sports wagering beyond the boundaries of the compacting tribe’s Indian lands. Then the governor and tribe submitted their compact for legislative approval.
The Senate and House both approved the compact Friday, the last day of Kansas’ legislative session.
Why Kansas tribes needed the change
The Kansas sports betting law allows Kansas tribes to offer sports wagering through an online platform under substantially the same terms as the commercial casinos in the state.
Casino gaming operates differently in Kansas than most states. The four casinos are owned by the state, which contracts with commercial companies to run the casinos on the state’s behalf.
For sports wagering, the Kansas Lottery offers betting through a platform managed by the business entity. As passed last year under SB 84, tribes would have to do the same.
In Michigan and Connecticut, tribes offer statewide online gaming through commercial agreements with the state. But in Kansas, tribes would offer online sports betting under a state-run system.
This proved problematic for tribes, which view themselves as sovereign governments. The Prairie Band Potawatomi Nation prefers to attempt statewide online sports betting under the Indian Gaming Regulatory Act (IGRA).
However, SB 84 included the following language:
“No compact … shall include sports wagering beyond the boundaries of the compacting tribe’s Indian lands.”
The correction, passed this year under HB 2058, simply removes that language from the Kansas sports betting law. This allowed the state and tribe to move ahead with statewide online sports betting in their compact.
Commercial casinos dropped opposition
When the Prairie Band first proposed this change under SB 322, casino companies voiced their opposition at a Senate Committee on Federal and State Affairs hearing.
Representatives of casino managers expressed the following concerns:
- Tribes would not be required to pay the 10% tax, putting casino managers at a competitive disadvantage.
- Tribes wouldn’t face the same state regulation limiting games and bets offered.
- Eliminating the requirement that all sports wagering beyond the boundaries of Indian lands must be owned and operated by the state would violate the Kansas Constitution.
Ultimately, the casinos dropped their objections. In the compact, the Prairie Band agreed to keep games and bets offered consistent with the state.
And any tribe looking to start up online sports wagering in Kansas will be the ones at a disadvantage. They’ll be entering an established market with the top online sportsbook operators already taken.
Six online sports betting apps launched last September:
- Hollywood Casino at Kansas Speedway: Barstool
- Kansas Crossing Casino: BetMGM, Caesars, PointsBet
- Kansas Star Casino: FanDuel
- Boot Hill Casino: DraftKings, Bally Bet (not yet live)
Tribal online gaming under IGRA rests on court decision
The Prairie Band’s compact with the state now must get federal approval from the US Department of Interior’s Bureau of Indian Affairs.
Compacts under IGRA are only for gaming activities that occur on tribal land. The compact includes language asserting that online sports bets taken around the state occur at servers located on tribal land.
The Seminole is the only other tribe to try such language under IGRA in a compact with the state of Florida. And while the Department of Interior let the compact through, a federal district court struck down the compact late in 2021.
The case, West Flagler Associates v. Haaland, currently is being heard by the US Court of Appeals for the DC District.
The Prairie Band’s compact includes language that the tribe could only begin offering online sports betting statewide in the event of a favorable court ruling.
In that event, three additional Kansas tribes could compact with the state to offer statewide online sports betting:
- Iowa Tribe of Kansas and Nebraska
- Kickapoo Tribe of Indians of the Kickapoo Reservation in Kansas
- Sac and Fox Nation of Missouri in Kansas and Nebraska