Kansas Casino and Card Room Gaming
In 2004, the Senate rejected a proposal to expand gambling, the Expanded Gaming Opportunity Act, which would have authorized up to five resort casinos. The casinos would have been privately owned and run with help from the Kansas Lottery.
In March 2006, a bill to authorize casinos and slot machines at dog and horse tracks failed in the Kansas Senate.
In March 2007, after voter approval, the legislature passed the Kansas Expanded Lottery Act (KELA) (SB66), which authorized the state of Kansas to own and operate one destination casino in each of four designated gaming zones: northeast, southeast, south-central and southwest Kansas. The KELA also expanded casino gambling to the three licensed pari-mutuel racetracks within the state. The Lottery and the KRGC were given ultimate control over all aspects of gaming operations, and a separate contract was required between each agency and the casino or racino facility. The KRGC was given responsibility to regulate gaming operations. The Act authorized the Lottery to initially distribute a total of 2,200 electronic gaming machines (slots) at all three racetracks with a minimum of 600 machines for each racino, with an additional 600 machines available after all casinos were operating. Each slot machine is required to have a prize payback minimum average of at least 87% over the life of the machine. Each racetrack was required to make a one-time payment of $2,500 for each slot machine located at the track. Distribution of racino net gaming revenue was mandated at 40% to the state general fund, 25% to the racino manager, 15% to the Lottery for approved expenses, 14% split evenly between horse and greyhound purse supplements, 3% to the local host government, 2% to a problem gambling fund and 1% to a fair racing supplement fund. The distribution of destination casino net gaming revenue is the same as for racinos, except that the state is allotted a minimum of 22% and the casino manager a maximum of 73%, with the Lottery and KRGC expenses paid out of the casino manager's distribution. No dealer-operated table games were approved. The first casino authorized under the KELA, Boot Hill Casino and Resort in Dodge City, developed by Butler National Corp., opened in December 2009.
In May 2015, a bill was approved by a state Senate committee that would decrease the state's share from 40% to 22% of net gaming revenue from slots at tracks, in response to track owners claiming the current share is too high for slots to be profitable. Much like similar efforts in the past, the bill failed to pass.
KELA provided for a countywide special vote to approve or veto any proposed casino within its boundaries. The vote for the casino and racetrack slot machines passed in both the northeast and southeast zones, and in the southwest zone only the casino passed. However, in the south-central zone, Sedgwick County voted against both the casino and racetrack slot machines and Sumner County voted in favor of a casino.
Even though KELA passed, the legality of the Act remained in question and the state Attorney General filed an appeal in Shawnee County district court. The district court's ruling that KELA was constitutional triggered an immediate appeal to the Kansas State Supreme Court. Then, on 27 June 2008, that court also upheld the Act's constitutionality, clearing the way for both the casinos and the remaining racetracks to proceed.
In May 2008, the Kansas Lottery Commission approved a proposal by Penn National Gaming (PNG) for a planned $125 million casino in Cherokee County. Hollywood Casino opened in February 2012 with 2,000 slot machines and over 75 tables.
Hollywood Casino's completion was not met without its challenges. In July 2008, PNG announced it would not commit to building a casino in Cherokee County unless its contract for Sumner County was also approved. In September 2008, PNG pulled out of its Kansas casino plans. Cherokee County officials filed a lawsuit against the company for $52 million in damages. The county won a temporary order from a Shawnee County District Court judge to put a lien on PNG's $25 million state gambling "privilege fee" that would have been refunded to it. In October 2008, PNG became involved in its second legal battle after deciding to pull out of its casino deal in Kansas. HV Properties of Kansas, which was to sell PNG the land for the planned casino, claimed a default of sales contract and demanded its promised payment of $37.5 million.
At the end of May 2008, a total of 10 proposals were approved by the Commission: five in Wyandotte, three in Sumner and two in Ford. Public hearings were held during the summer in the various counties. The winners in each county were decided in August 2008. The Ford County project – Boot Hill Casino and Resort, developed by the Butler Corporation – was one of the projects approved by the Lottery Commission. Boot Hill became the first commercial casino in the state when it opened in December 2009.
The Clean Indoor Air Act of 2010 included exemptions for state-owned casinos because of fears that a smoking ban would result in revenue decline.
In May 2013, results of an American Gaming Association 2012 survey of casino gambling finances by state showed that Kansas topped the list as the fastest-growing casino state in that year. Most of the growth could be attributed to two new casinos that had opened recently. The Hollywood Casino in Wyandotte County had opened in February 2012 and the Kansas Star Casino in Mulvane opened its doors in December 2011.
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