Lawmakers Rule Against the Expansion of the Kansas Sports Betting Market

The expansion of the Kansas sports betting market is officially on hold. It may even be scheduled to shrink.

Right now, six different operators are licensed to offer online sports betting in Kansas: DraftKings, FanDuel, ESPN Bet, Caesars, BetMGM and Fanatics. According to sports betting regulations for The Bluegrass State, up to 12 operators can have permission to operate inside the market. This latest ruling ensures that the remaining balance will be filled out anytime soon.

However, the ruling also throws the future of current Kansas sports betting operators into doubt. All six of the aforementioned companies have gaming compacts with The Bluegrass State that are set to expire in a little over two years. Many officials initially hoped to extend those agreements before then. The most recent development, though, prevents them from doing just that. Some have even speculated this decision could lead to a premature shuddering of operations for sportsbooks in the market.

It all raises the question: What happens now?

What Exactly Just Happened to Kansas Sports Betting Operators?

Before exploring what is next, we must first understand what just happened. Tom Nightingale does an excellent job of breaking it all down for SBC Americas:

“Budget bill SB 125, which has been debated and refined numerous times since late January, was approved in both [the House of Representatives and Senate]. The bill had already received consent from both the Senate and the House but the measure relating to betting was initially vetoed by Gov. Laura Kelly. However, enough lawmakers voted at the second time of asking to override multiple vetoed provisions, including this one. The provision in the 298-page text stipulates that until the end of the 2025-26 fiscal year, the Kansas Lottery shall not spend funds ‘to negotiate or enter into any contract or extension or renewal of an existing contract for the management of sports wagering with any lottery gaming facility manager.’

Translation? Kentucky sports betting regulators cannot hand out additional licenses until the end of the 2025-26 fiscal year. What’s more, they are unable to lengthen the current agreements for companies already licensed in the market.

Will Sports Betting Operators in Kansas Close Up Shop?

This ruling initially led many to believe Kansas online sportsbooks would be forced to cease operations. It turns out that is not the case.

“Just want to clarify: None of the leading online sportsbook operators in Kansas will go dark as a result of [the] vote,” writes Sports Betting Alliance President Jeremy Kudon. “Most contracts with the lottery run well into 2027. “But I wouldn’t let the Kansas legislature off so easily. They had no idea when these contracts expired and were willing to take your favorite online sportsbook apps away from Kansans. We’re not going to let that happen.”

Concerns over Kansas sports betting apps shutting down right away were always overblown. Even if we had no idea when their contracts expire, they certainly would not be ending right now. If that were the case, this issue would have been broached well before January.

Now, could operators threaten to close down as a negotiating tactic? Perhaps. But the efficacy of that approach is debatable. Unless all six Kansas sportsbooks agree to go inactive, any shutdowns simply increase the market share for competitors. 

Looming Launch of Missouri Sports Betting Ensures Kansas Sportsbooks Aren’t Going Anywhere…Right Now

Beyond that, there is also too much money involved for companies to just walk away. Ever since launching in September 2022, Kansas sports betting is exceeding expectations at basically every turn. Operators do have some leverage. But only if they act in unison. Failing that, shutting down stands to eat into their bottom line a great deal. That is not an ideal business model when so much money was spent by stakeholders advocating for Kansas sports betting legalization just a couple of years ago.

On top of that, with sports betting in Missouri scheduled to launch later this year, the current Kansas sports betting climate is enjoying an unrepeatable peak. Sportsbooks in Kansas are getting a ton of business from Missourians, who do not have direct access to services in their own state. Much of that revenue stream will dissipate by December 2025, when Missouri sports betting is (for now) set to debut.

Uncertainty Still Awaits The Kansas Sports Betting Market

Nothing should change inside the Kansas sports betting market imminently. It seems that the licensed operators are protected against any impromptu closure. They have the right to operate inside the state until 2027. 

With all of that said, the current language does open the door for longer-term uncertainty. As of now, Kansas sports betting regulators cannot broker new deals with DraftKings, FanDuel, ESPN Bet, Caesars, BetMGM or Fanatics until sometime in 2026. While a ways off, the window to renegotiate still opens before any compacts expire. That is a big deal.

Then again, these agreements can take some time to hash out. What if regulators want to raise the Kansas sports betting tax rate? Or what if they want to add more online sportsbooks in Kansas in 2026 or beyond? Officials may even want to increase regulation over mobile betting sites. We have seen some markets start to call for restrictions on advertising, individual betting limits, more proprietary transparency and much more.

All of these factors require different discussions. That can take time. The parties involved will go back and forth. Kansas sportsbooks will protect their business interests, pushing back against increases in expenses and regulation. State officials, meanwhile, will try to leverage interest from other license applicants as well as the profits companies have enjoyed over the past few years.

In the end, a middle ground will be found. But as things stand now, that happy medium may not be discovered until after current sportsbooks licenses expire. And if that happens, there could be a scenario in which the Kansas sports betting market ends up shutting down, even if only temporarily.

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: