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During a more than six-hour session recently, the Kansas Special Committee on Federal and State Affairs reviewed the state’s 10% sports betting tax rate, with some lawmakers suggesting the state raise its tax rate to generate more revenue.
The meeting included testimony from stakeholders and a review of how other states operate their sports betting markets and tax rates.
Lawmaker presses for new sports betting model
The committee meeting featured a wide range of insights and comments from lawmakers, regulators, and stakeholders.
Molly Pratt, fiscal analyst with the Kansas Legislative Research Department, highlighted data that compared Kansas sports betting tax revenue to other states with legal sports wagering. The data she presented showed that Kansas generated the third-smallest portion of gross revenue and sixth-lowest total tax revenue dollars in the country in FY 2025.
Here’s a look at the data for the bottom six states:
| State | Sports wagering tax revenue (FY 2025) | Gross revenue share |
|---|---|---|
| Kansas | $17,088,747 | 6.5% |
| Iowa | $16,214,564 | 6.8% |
| Michigan | $15,231,044 | 3.1% |
| Delaware | $8,779,822 | 33% |
| Maine | $6,373,481 | 9.6% |
| West Virginia | $5,258,228 | 10% |
After Pratt presented the data, lawmakers discussed the possibility of using a single sports betting operator that negotiates directly with the Kansas Lottery, rather than managing contracts with every casino that has a sports betting license.
Rep. Francis Awerkamp expressed frustration over Kansas’ low tax revenue.
“Taking a look at these states, Rhode Island gets 51% … The net that Kansas gets is 6.5%. Am I seeing this correct? That some of these states get 50% of the gross, and we get 6.5%? There is a lot of money there; it’s just, where does the money go?”
Awerkamp suggested that, when current sports betting contracts expire in 2027, Kansas switch to a single operator model like the one Oregon uses.
Stakeholders argue against raising tax rate
While Awerkamp and other legislators argued for a higher tax rate, testimony from stakeholders pushed back on that notion.
Scott Ward, a representative from industry advocate Sports Betting Alliance, argued in his testimony that raising taxes would cause sportsbooks to offer worse odds to bettors to make up for lost revenue. Worse odds mean that bettors may turn to illegal offshore operators or Missouri sportsbooks to wager.
John A. Pappas, state advocacy director at iDevelopment and Economic Association (iDEA), made the same argument at the committee meeting.
“Ratcheting up taxes sounds like quick money, but the real-world effect is to make the legal market less competitive against offshore sites that pay zero Kansas taxes and offer unregulated prices.”
Pappas then pointed out that Missouri will charge a 10% tax rate when it launches sports wagering on Dec. 1.
“If Kansas raises costs while Missouri opens its doors at market-standard terms, the line of least resistance for price-sensitive Kansans becomes obvious: drive across a bridge, or go back to an offshore app. The surest way to protect Kansas players and Kansas revenue is to hold the line on a tax structure that works and pair it with continued enforcement.”
