Governor proposes state-owned casinos

Bill Draper

Monday, Feb. 2, 2004 | 8:52 a.m.

TOPEKA, Kan. -- Kansas could own and operate up to five "world-class, destination casinos," and video lottery terminals could sprout throughout the state, under a gambling initiative outlined Friday by Gov. Kathleen Sebelius.

No state investment would be involved in the casinos, which would be built by private developers and run by a private management firm under the auspices of the Kansas Lottery, Sebelius said.

The governor said the features of her proposed Expanded Gaming Opportunity Act, presented in detail for the first time Friday, could draw tourists and help keep Kansans' gambling and entertainment dollars in the state.

"With first-rate lodging, dining, conference and entertainment facilities, these high-quality casinos will draw countless tourists -- and their dollars -- from across the region," Sebelius said at a news conference.

Sebelius' plan would allow for up to 2,500 video lottery terminals spread among the state's five parimutuel tracks, and up to five video lottery machines at each of the 240 fraternal clubs in the state. The terminals would be under the control of the Kansas Lottery.

Legislative leaders immediately expressed reservations about the Democratic governor's plan, calling it too broad and an unsatisfactory answer to the state's revenue needs.

"If you're doing this, you do it because people want to go gaming," House Speaker Doug Mays, R-Topeka, said. "If this passes, it should be done just for entertainment purposes and not for any fiscal consideration at all."

Mays said the bill appeared to advocate for "widespread gambling."

"This seems to have everything but the kitchen sink, and maybe even the kitchen sink," he said.

Senate President David Kerr, R-Hutchinson, expressed similar concerns that the proposal exceeded any previous plan to expand gambling. He said he wasn't "running traps" to measure support for the measure.

A single large casino could be expected to bring in about $160 million a year, with the state's share estimated at around $30 million. Video lottery terminals at the tracks could bring the state about $60 million, Sebelius said, and the terminals at the fraternal organizations would bring in an estimated $7 million a year.

The plan includes creation of a Destination Casino Commission, which would review proposals by developers and consider feedback from the communities for which the casinos are proposed.

Once the commission issues a certificate of authority to build a casino, local voters would decide whether they want the casino in their community.

"That way, local voters will have the final say over what happens in their communities," Sebelius said.

The proposal also includes provisions for the communities in which state-owned casinos are built to receive up to 4 percent of the gambling revenue, the governor said.

In Kansas, only two entities -- the state or an Indian tribe -- are empowered by the state constitution to own a casino. All four tribes with Kansas reservations already have casinos.

Sebelius said state ownership gives the state more control of the operation and a more significant share of the gambling revenue.

The governor has indicated that an Indian casino and state-owned casino could co-exist in Wyandotte County, though that would have to be borne out by a feasibility study.

She said Friday that several proposals already have been submitted for a casino in Wyandotte County, including one from the Sac and Fox tribe that is being negotiated separately and would not fall under her plan.

"The tribal proposal is the most detailed and interesting," Matt All, the governor's chief counsel, said. "They have the financing and they're ready to go. The governor takes that proposal very seriously."