Kansas Online Sports Betting May Soon Allow for Tribal Participation

A new adjustment to state gaming laws could soon expand online sports betting in Kansas. If and when it does, the Kansas online sports betting market may never be the same.

Lawmakers in The Sunflower State recently amended their gaming policy to allow for tribal operators to eventually enter the Kansas' online sports gambling market. Emphasis on "eventually." 

The change, while officially approved, cannot actually be implemented just yet. A few more hang-ups are currently in the way—roadblocks that the state and their local tribes have no choice other than to wait out.

Details on New Piece of Legislature for Kansas Online Sports Betting

Matthew Kredell of PlayUSA unpacked the details of the new sports betting initiative green lit by Kansas officials:

"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 Governor 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."

This move, while significant, does not come as a huge surprise. Local tribes have been negotiating these terms with the state since legal online sports betting in Kansas this past September. And those talks were merely an extension of discussions that took place before gambling went live throughout the state.

The reason for the hold up: casinos. They initially opposed this policy change because of what they deemed unfair benefits. For example, the tribes would not be required to pay the 10 percent tax assessed to casino companies. They also wouldn't incur the same level of state regulation that limits gaming options. Both were seen as "perks" that would put casinos at an unnavigable advantage when it came to competing for sports betting business.

In the end, casinos walked backed their opposition. And while tribes looking to enter the online sports betting market still won't have to pay the same 10 percent, they did agree to restrict their gaming options in accordance with casino offerings.

When Can Tribes Officially Join the Kansas Online Sports Betting Business?

Though this amendment is seen as a huge victory for Kansas tribes, they won't immediately be able to join the online betting industry. The new gaming compact now needs approval from the US Department of Interior’s Bureau of Indian Affairs. 

On top of that, as Kredell noted, "compacts under IGRA are only for gaming activities that occur on tribal land." To get around this, the 2023 Kansas online sports betting compact includes language that stipulates tribes must have servers on-site that run their mobile wagering operations. However, it isn't yet clear whether this approach will hold. Only one other state has tried a similar workaround: Florida. We all know how that turned out.

Indeed, sports betting in Florida was legalized and went live at the end of 2021. But it was repealed before the start of 2022 after the Seminole tribe started offering online wagering options. Their gaming compact with The Sunshine State allowed them to provide gambling services on tribal land only. As a result, West Flagler Associates financed a lawsuit alleging the Seminoles' online presence was unconstitutional. For their part, the Seminoles argued that the apps were run by servers on tribal grounds, which therefore made the applications tribal property. 

A judge from the District Court ultimately sided with the plaintiffs. Florida sports betting was then repealed and has been tied up in litigation ever since. The matter is presently being deliberated in the U.S. Court of Appeals, and many believe it will end up in the Supreme Court.

This case isn't a perfect parallel for what's happening in Kansas. The Seminoles had gaming exclusivity in Florida. Kansas' tribes are merely hoping to enter an already-legal market rather than create one. Still, the state's new gaming compact also includes language that says its implementation is contingent upon a favorable ruling in the Florida case.

Is the New Kansas Online Sports Betting Compact a False Flag?

Many aren't sure what to think about this piece of Kansas legislation.

On the one hand, it opens the door for tribes to crack a gaming arena they've been attempting to enter for years. On the other hand, tying this compact to the fate of Florida sports betting rings a little hollow. After all, no one is quite sure when the litigation on that case could conclude. It has already taken nearly two years.

Tribes could look to partner up with established online sportsbooks rather than set up independent mobile operations. That is allowed as part of this gaming compact. But so many of Kansas' casinos have already linked up with most of the best online betting sites in the USA. There aren't many, if any, operators left for them to choose from.

This essentially means that tribal participation in online sports betting will not be settled until the case in Florida reaches a verdict. And that, in turn, means this latest Kansas gambling compact could be rendered virtually pointless if the U.S. Court of Appeals rules in favor of West Flagler Associates.

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