Kansas Ready To Commit Lottery Funds To Lure Chiefs, Royals From Missouri

Kansas legislators are developing a playbook to steal the Chiefs and Royals away from Missouri.

A key piece to that playbook is the Kansas Lottery.

Last week, lawmakers in the state approved a bill that would allow revenue from the lottery to help contribute toward building new stadiums for the two pro sports teams in hopes of luring them to Kansas.

Over the next year, the franchises can negotiate with both Kansas and Missouri to determine their future home venues.

So, in the near future, revenue from lottery draw games and scratchers in Kansas could be used to bring pro sports to the state.

HB2001 gets bipartisan support in Kansas

Two months ago, Jackson County residents in Missouri rejected a proposed sales tax to help keep the Chiefs and Royals in the state. The sales tax would be 3/8 cents over 40 years.

The lease on the Missouri complex with the side-by-side stadiums concludes in January 2031.

Looking at this as an opportunity, lawmakers in Kansas quickly acted and brought forth House Bill 2001. The legislation would allow for funding of a stadium for the Chiefs and Royals through STAR bonds.

STAR bonds stand for sales tax and revenue bonds. They are used so the Kansas government can provide money upfront to draw in new attractions.

The bill calls for the STAR bonds to represent up to 70% of the estimated cost of the project, paid off over 30 years. Developers would provide the rest of the money.

Sales tax collected from purchases at the stadiums and the surrounding area would go toward paying off the STAR bonds. Lottery revenue and sports betting dollars would also contribute to that same effort.

The Kansas House approved the bill 84-38, while the Senate passed it by a 27-8 vote.

Kansas Gov. Laura Kelly is not expected to veto the bill. The Democratic governor seems to be in lockstep with the Republican-led legislature. She gave a statement to the Associated Press expressing excitement at the opportunity to bring the two franchises to Kansas:

“Kansas now has the opportunity to become a professional sports powerhouse.”

If passed, the Chiefs and Royals would have until July 2025 to negotiate with the state of Kansas to attempt to reach an agreement on relocation and venues.

How much Kansas Lottery revenue would go toward STAR bonds?

According to the legislation, any revenue from the Kansas Lottery that surpasses $71 million each year would be used to repay the bonds.

In fiscal year 2023, the Kansas Lottery had $338.2 million in sales. Of that total, 60.7% ($205 million) went back to the consumers in prizes.

Revenue that assisted with state programs amounted to 25.5% of the total, which equaled $85.1 million.

So, should the bill have been enacted for last year’s lottery revenue, $14.1 million would have helped pay off the STAR bonds.

Since FY12, 11 of the last 12 years have seen Kansas Lottery revenue exceed $71 million. Only FY20 failed to do so. The last two fiscal years produced a total of over $80 million, including last year’s record of $85.1 million.

Should the stadiums not generate enough money through sales tax to make the bond payments, the Kansas Lottery could be forced to contribute more to the projects. That would cut into the money the lottery provides to government services.

Kansas has already funded venues through STAR bonds in the past. That includes the Kansas Speedway, which holds NASCAR events each year.

The Kansas City Star projects that a new stadium for the Chiefs would cost at least $2.5 billion. A new Royals stadium would be at least $1.5 billion.

Chiefs, Royals could be using Kansas for leverage

Though Kansas has put this bill through the House and Senate, nothing is set in stone.

Neither the Chiefs nor the Royals have committed to moving to Kansas. However, both have said they are open to relocating.

The Chiefs issued a statement through multiple media outlets in the Kansas City area:

“We support their efforts to expand the existing program and congratulate them on passing the legislation in special session. We look forward to exploring the options this legislation may provide.”

Kansas City, Missouri, Mayor Quinton Lucas told the Kansas City Star that this is just part of the negotiating process, and he will put a good offer to keep both teams in Missouri:

“Today was largely, in my opinion, about leverage. And the teams are in an exceptional leverage position.”

That sentiment is also felt by Kansas Rep. Susan Ruiz, who told the Star she believes the state is a pawn in the teams’ efforts to get better facilities in Missouri:

“I think the Chiefs and the Royals are using us.”

Currently, Missouri’s deal is locked into Jackson County, where Kansas City is part of.

The Kansas bill incorporates all of the state, leaving options open as to where the stadiums could be built. The likelihood is that they would be constructed in the Kansas City area.

 

Photo by Reed Hoffmann / AP

About the Author

Drew Ellis

Drew Ellis

Lead Writer
A member of Catena Media since 2020, Drew Ellis is the Lead Writer at PlayiLottery, where he handles coverage of the online and retail lottery industry in the US. He previously spearheaded news content at PlayMichigan, where he covered one of the most prominent online lottery industries in the US — among the many other aspects of Michigan's sprawling iGaming market. You can email him at [email protected].
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