Kansas Gambling: A Shameful Legacy
For several years, Kansas' Gov. Sebelius has aggressively pushed for state-owned and -operated gambling. With two years remaining in her term as Governor, Kathleen Sebelius saddled Kansas families with state-owned casinos and a host of gambling-related ills Kansans will bear for years to come.
Kansas Supreme Court Okays State-Owned Casinos
If you live in Kansas, you're likely familiar with that sickening feeling in the pit of your stomach whenever a tornado touches down in a town or city nearby. Soon, Kansans will have that same nauseated sensation whenever they drive past three state-owned race-track casinos and free-standing casinos.
You can thank Gov. Sebelius and pro-gambling Kansas Legislators who voted to enjoin Kansas with the Gambling Cartel. Kansas will now bear the notorious reputation of being the first state to own and operate casinos. Kansas gambling will be controlled by - and accountable to - the government. Does anyone else smell the potential for corruption in the air?
On June 27, 2008, in a unanimous decision, the Kansas Supreme Court upheld the constitutionality of Sebelius' proposal, clearing the way for four state-owned resort casinos, with additional slot machines at the state's three race tracks.
The Kansas Supreme Court justified their ruling by citing a 1986 voter-approved amendment to the state constitution which permitted pari-mutuel wagering at horse and dog tracks; additionally, it authorized "state-owned and –operated lottery." The court claims this particular amendment opens doors that the Kansas constitution originally banned and makes Sebelius' gambling-expansion proposal constitutional.
The House Speaker called it "disingenuous" to argue that voters in 1986 wanted casinos when they voted for the state-owned lottery. "I was in the Kansas Legislature in 1986, and I can assure you that was not the intention of the amendment voters approved … There is a tremendous difference between a scratch ticket and a slot machine," he said.
Nonetheless, the Kansas Supreme Court unanimously voted that Sebelius' state-owned, state-operated gambling expansion proposal is, indeed, constitutional. With the court's final ruling, a large gambling-twister officially touches down in the state of Kansas. Citizens, brace yourselves.
Gov. Sebelius Saddles Kansas with State-Owned Gambling
When Gov. Sebelius first introduced her audacious concept of state-run gambling, casino operators or "investors" were reluctant to become involved, because of possible constitutional violations. Gov. Sebelius asked then-Attorney General, Paul Morrison, to file a so-called "friendly" lawsuit to test the law's (SB 66) constitutionality. Morrison's lawsuit, however, was a little too good, and it placed Sebelius' state-owned casino scheme in jeopardy.
Several months later, Morrison's name appeared in headlines across the nation, as a two-year extra-marital affair surfaced. After he violated the conduct of his office as DA, had an affair with state employee and influenced a federal lawsuit, Morrison resigned. His reputation, credibility and ability to remain in office dissolved.
It's interesting to note that another former Attorney General in the state had significant misgivings associated with Sebelius' earlier push to legalize state-owned and –operated casinos.
The former Attorney General's opposition was expressed in a Topeka Capitol-Journal article titled, "'Fox guarding the hen house' Plan would open door to corruption," [March 25, 2004]. "Gov. Kathleen Sebelius' gambling proposal would invite corruption like a high roller draws a crowd," he told the press. "state residents could be subjected to corruption and crime if lawmakers adopt Gov. Kathleen Sebelius' gambling plan." He went on to say her plan "would spawn a conflict of interest by putting regulatory authority for casino operations with the Kansas Lottery, which also would own the gambling operations. The setup provides an 'invitation to corruption' … ' You've got the fox guarding the hen house.'"
In the same article, a former Federal Bureau of Investigation agent, Tom Williams, said the introduction of riverboat casinos in Missouri led to convictions against six public officials and a dozen associates and co-conspirators on corruption charges. But, of course, that type of government corruption would never happen in Kansas with state-owned and –operated casinos, right?
Several questions come to mind. How will Kansas' state-operated regulatory agencies wield accountability of state-owned and -operated casinos? How will the Left Hand admonish the Right Hand if both are attached to the same governing body? How much say will citizens have in the operation of these casinos and how the revenue streams are directed? Lastly, does government have any business exploiting the citizenry it serves and protects through the promotion - and operation - of state-owned gambling establishments? And could this decision ignite a wildfire and spread to other states considering gambling expansion for the purpose of revenue?
A Stealth Amendment, Filibuster, Close Votes
SB 66 or the Kansas Expanded Lottery Act of 2007 (KELA) kept moving forward in the Kansas Legislature, despite the unquestionable conflict among legislators' shared conscience. One of the more troubling issues with SB 66 was the stealth gambling amendment inserted during the wee hours of the morning. For many Legislators, this back-door tactic was the final straw.
"MR. SPEAKER: I took an oath to uphold the Constitution of the State. The renewal of the Kansas Lottery is constitutional, as the voters approved it with a Constitutional Amendment. I will vote to allow the people to change the constitution on this issue. The amendment to this bill at 2:30 a.m. Saturday morning provides for state-owned and state-operated casinos. That is not what the voters of Kansas approved. It does not meet the test of deliberative, informed decision-making. I can do nothing less than uphold the Kansas Constitution. I vote NO on SB 66 as amended." — Kansas Representative, March 26, 2007
"MR. SPEAKER: While I supported a Constitutional Amendment that would prevent the State from owning casinos and allow the people of Kansas to vote for privately owned ones, I must vote NO on SB 66. The State has no business owning and monitoring casinos. In addition, a 98-page amendment went on to allow for State-owned destination casinos. This amendment, presented in one day, gave Legislators little time to thoroughly understand. We have passed other pieces of legislation in the dead of night only to be back the following session to correct the unintended consequences of our actions."— Kansas Representative, March 26, 2007
All government facilities of Kansas are owned, operated and controlled by the people of Kansas - either as citizens of the United States (represented by federal government) or as citizens of Kansas, represented by their state government. What does this mean? Residents of Kansas are now perilous "co-owners" and "managers" of seven new casinos and racinos. Citizens have a number of ways to be heard, such as boycotts, protests, letters to newspapers, calls and visits to Legislators, advocating for new laws to reduce gambling and forming - or joining existing - grassroots opposition groups. These are all civil means by which to express opposition in America.
Unfortunately, marketing campaigns, addiction programs, increased crime, rising bankruptcies and ruined families will be paid for by you, Mr. and Mrs./Ms. Taxpayer. Economist Earl L. Grinols calculates that gambling fails the cost-benefit analysis, and the costs of gambling outweigh the benefits by a factor of three to one. Law Professor John Kindt estimates that for each dollar in casino revenues to the state, it costs taxpayers about $1.90. Many Legislators realize the costs associated with gambling, but others just saw easy money and a quick fix for budgetary woes.
The Kansas Legislature was heavily criticized for bypassing traditional procedures to adopt the measure, amending the Kansas Lottery without close scrutiny. "The whole debate process was as farce," said Glenn Thompson , representing a group called Stand Up for Kansas. Indeed, the bill was later faulted for mistakes and missing necessary details.
After a prolonged filibuster in the Senate (in attempt to gain more favorable votes) and relatively close final votes to pass SB 66 in both the Kansas State House and Senate, SB 66 (KELA) was finally placed on Gov. Sebelius' desk on April 4th. With a grin from ear to ear and with significant media coverage, Gov. Sebelius signed the bill five days later, on April 9, 2007.
"It is about keeping money here in Kansas without raising taxes," Gov. Sebelius said, with only two years left to serve in her term as Kansas' governor. "We want investors [casino backers and gambling interests] to be confident." Such decisions make you wonder who, exactly, Gov. Kathleen Sebelius is serving: citizens and families of Kansas or the highest bidder?
Sebelius will leave behind a trail of destruction and a shame. Saddling Kansans and future generations with the burden of state-owned and –operated gambling is flagrant negligence that will jeopardize the wellbeing of Kansas families and the state's stability in years to come.
Know Before You Vote
Citizens, remain informed. Pay attention to who voted for Kansas to own and operate casinos. Will these same officials have your family's best interest in mind when voting on future policies? We urge you to contact your Legislators - in both the House and Senate - if they supported SB 66 and share your disappointment in their poor decision.
HOUSE VOTE - Journal of the House – Kansas - March 26, 2007
On roll call, the vote was: Yeas 64; Nays 58; -Passed-
[Yeas Supported Kansas State-Owned Gambling Policy]
Access House voting record on SB 66 (p. 610).
SENATE VOTE - Journal of the House – Kansas - March 28, 2007
(P. 606) On roll call, the vote was: Yeas 21; Nays 19; -Passed- (
[Yeas Supported Kansas State-Owned Gambling Policy]
Access Senate voting record on SB 66 (p. 606).
Cheers to Legislators Who Stood Up for Families and Kansas' Future
Below are several comments from Representatives and Senators who had the courage to express their opposition to SB 66 during the House and Senate hearings. Reading their comments is well worth your time.
Journal of the House – Kansas - March 26, 2007
COMMENTS FROM HOUSE REPRESENTATIVES
(p. 610, also see votes on this page)
"MR. SPEAKER: With the rapid increase in the size of the gambling footprint in Kansas, there will be a sizeable increase in number of persons addicted to gambling. The number of families affected by this addiction grows exponentially. I will vote no on SB 66 and my conscience will be clear. Will yours?"
(p. 611)
"MR. SPEAKER: I vote no on SB 66. It is sadly ironic how we, the state, justify our support for gambling in Kansas. It is acceptable to have gambling throughout Kansas as the state needs the income from the sin taxes. Cigarette, alcohol and gambling owners and manufacturers are heavily taxed and regulated to reduce use in our society. But we insist they be allowed in casinos to keep them profitable and provide the state with tax income. Is this not hypocrisy? That adults need to drink, smoke and gamble more so we can afford to pay for our youth’s education?"
"MR. SPEAKER: What are we doing here? We are opening up a Pandora’s box that will have dire consequences for everyone in this room. Each of you will be impacted negatively by the passage of this bill. You say, 'Look at all the money it will bring to Kansas!' I say, 'See all the grief you have caused!' You say, ‘‘Gambling is already here.' I say, 'You are enabling an addictive behavior.' The benefits of the money that will come from this cannot outweigh the grief it will cause. I vote 'NO' on SB 66."
"MR. SPEAKER: With this bill, we are combining government, which operates best when kept to a limited size, in part because of man’s flawed nature, with gambling, a practice known to corrupt. Nowhere in even a broad interpretation of the idea of limited government does there exist room for state-operated gambling. I vote no on SB 66."
"MR. SPEAKER: With no animosity towards anyone in this body I am deeply disappointed in the passage of legislation that provides for state sponsored casino gambling. The benefit to the state coffer is offset by the potential for serious compromise to our long term financial viability. With the continued expansion of gambling in Kansas and throughout our country, future generations may gamble away their future and the future of our great state and nation. Thomas Jefferson state 'that it is our own fault if we are ever driven to the miserable resources of gaming, which corrupts our dispositions, and teaches us a habit of hostility against all mankind.' I vote on on SB 66."
"MR. SPEAKER: I vote no on SB 66 because it is bad public policy to reward failed business practices with millions of dollars. It is bad public policy to spread gambling’s social problems throughout the state. It is bad public policy to allow gaming interests full access to the wealth of their patrons for the stated reason of giving them a chance to succeed. I vote no because we have no idea of the full economic consequences of SB 66."
(p. 612)
"MR. SPEAKER: While I supported a Constitutional Amendment that would prevent the State from owning casinos and allow the people of Kansas to vote for privately owned ones, I must vote NO on SB 66. The State has no business owning and monitoring casinos. In addition, a 98-page amendment went on to allow for State-owned destination casinos. This amendment, presented in one day, gave Legislators little time to thoroughly understand. We have passed other pieces of legislation in the dead of night only to be back the following session to correct the unintended consequences of our actions."
"MR. SPEAKER: I vote No on SB 66. Supporters of gambling agree that lives and families will be destroyed as a result of SB 66. They admitted it during debate and put language in SB 66 that requires 2% of the gambling profits go to the Problem Gambling and Addictions Fund. They vote yes knowing full well that lives and families will be destroyed, but point to the amount of money the state is projected to bring in. It is written ‘‘What will it profit a man if he gains the whole world and loses his own soul? Or what will a man give in exchange for his soul?’’ Mark 8:36"
"MR. SPEAKER: To usher full blown Casino Gambling into our state without a vote of its people, with all the empirical evidence presented showing a likely overall negative effect on our economy, and undeniable social costs, would be poor representative government and foolish and reckless action. I vote NO on SB 66. Power to the People!"
"MR. SPEAKER: Whatever happened here on the floor of the House last week still bewilders me. As a state, we want to be the first in the nation to own and operate casinos, yet have millionaires and billionaires serve up gambling venues whereby they 'work for us' after they have designed this bill for our approval? As a state, we want to be sure that these wealthy men continue to offer their largess in portions to our re-election campaigns while we indicate that we are in charge. We, as a state, have the obligation to our citizens to say NO...and I do on SB 66."
"MR. SPEAKER: I vote no on SB 66, for lack of good government reporting and the biggest reason is in regard to access to instant money and credit by problem gamblers. As I left Saturday morning, I was utterly disappointed in people that I once referred to as friends. This anger grew Saturday, but a wonderful thing happened on Sunday morning at Mass. Through God’s wonderful grace the anger was replaced with peace through my forgiveness of those whom angered me on Saturday. I ask the body to forgive me for my anger toward folks in this room, just as I through God’s help have forgiven."
"MR. SPEAKER: This 98 page gambling amendment was conceived in secret by dubious parents and born prematurely at night. It could not stand inspection in the light and so bypassed legislative hearings. What a travesty. It is shameful that the state will now sponsor activities that promote social decay, bankruptcies, crime, suicide, divorce, embezzlement, etc. we have gone to the 'dark side.' An ominous cloud has now covered Kansas and it will never go away. New state policy: Pray upon the weak to satisfy the greed of the out-of-state rich. This is Robin Hood in reverse. Just follow the money! I vote no on SB 66."
(p. 613)
"MR. SPEAKER: I took an oath to uphold the Constitution of the State. The renewal of the Kansas Lottery is constitutional, as the voters approved it with a Constitutional Amendment. I will vote to allow the people to change the constitution on this issue. The amendment to this bill at 2:30 a.m. Saturday morning provides for state-owned and state-operated casinos. That is not what the voters of Kansas approved. It does not meet the test of deliberative, informed decision-making. I can do nothing less than uphold the Kansas Constitution. I vote NO on SB 66 as amended."
"MR. SPEAKER: I’m aware of pressing financial needs and legislative responsibilities and I, as a business person, support reasonable taxes. I’ve listened carefully to the debate on the expanded gaming amendment, and given it careful consideration. The economic gain for the state at the expense of our citizens losing money is not in our state’s best interests. Deferred maintenance could be a benefactor of new revenue; the bill is silent on this. I support the Kansas Lottery’s renewal in another measure which will come before us again at a later time because it was approved by the voters who changed the Constitution. I vote no on SB 66."
"MR. SPEAKER: I respectfully vote no on SB 66. It is not that I am against casinos; what I am against is the state of Kansas owning and operating them."
"MR. SPEAKER: SB 66, as amended, is not about bringing in more revenue for the state of Kansas. It’s about a handful of out-of-state billionaires using the power of the state of Kansas to enrich their personal fortunes on the backs of Kansans who cannot afford to be throwing money away. Most of these will be in the low-income category, and many will lose everything they have. Mr. Speaker, I vote ‘‘no’’ on SB 66."
"MR. SPEAKER: I vote ‘‘NO’’ on SB 66. Our constituents are counting on us to serve the best interests of our districts and our state. The gambling amendment added to this bill is not the product of good public policy crafted after thoughtful consideration, purity of motive and open and public vetting. To the contrary, the blind and naive adherence to the gambling coalition’s insistence that no amendments to their plan be considered is stark evidence of how seductive big-money gambling interests can be. Kansan’s will be the ultimate victims if this patently unconstitutional measure is allowed to move forward."
"MR. SPEAKER: Last Friday and into the early morning hours of Saturday we debated SB 66 that renewed the Kansas lottery. A 95 page, very vague amendment was offered and after many hours of emotional debate, passed. I love the state of Kansas and its citizens and will not vote for a bill that will drain our citizens of their hard earned money. Slot machines, glitzy casinos and all the bells and whistles will reduce the quality of life in Kansas as a result of allowing further gambling in our great state. We vote no on SB 66. My disappointment is that casino gambling has not and will not face a public vote. In 1986 the people of Kansas voted for a constitutional amendment to allow the Lottery, not casino gambling. This bill adds Casino gambling to the Lottery reauthorization. I cannot support a proposal of this gravity that goes around a vote of the people of Kansas. I vote no on SB 66."
"MR. SPEAKER: Kansas is the only State in the nation to undertake the folly of State owned and State operated gambling. A careful examination of this amendment will bring you to conclude that this bill is written by and for those with gaming interests, and not for the benefit of Kansas and its citizens. This bill is unconstitutional. Additionally, it promotes addiction, bankruptcy, corruption and other societal ills, and will have a detrimental effect on Kansans. I have a duty to our citizens to uphold the constitution. I have a duty to God to promote a moral and just society. SB 66 violates both. I emphatically vote no."
PROTEST
"MR. SPEAKER: Pursuant to Article 2, Section 10, of the constitution of the State of Kansas,
I protest the passage of SB 66.
Many states have already allowed legalized casino gambling and slot machines, so typical
outcomes and statistics are readily available.
What can we expect? People will make money.
Many already have.
Wealthy developers, pro-gambling politicians, and businesses that normally experience
up- ticks whenever gambling comes to townpawn shops, cash advance loans, and otherscan
expect to see more money in their coffers.
Specifically, some wealthy people are going to get a lot wealthier.
What else can we expect? People will lose money.
From a study by the National Bureau for Economic Research, Harvard University Press:
‘‘Legalized gambling acts as a regressive tax on the poor.’’ Since 70 percent of casino gam-
blers in non-tourist areas come from fewer than 35 miles away, it is more accurately a tax
on Kansas’ poor.
Traditional businesses can expect increased absenteeism and declining productivity. (Uni-
versity of Miami Business Law Journal) They can also expect an impact on revenues. When
casinos came to Wisconsin, ‘‘More than 10 percent of locals would spend more on groceries
if it were not for the casino, while nearly one-fourth would spend more on clothes. Thirty-
seven percent said that their savings had been reduced since the casino had opened’’ (Wis-
consin Policy Research Institute Report)
When casinos opened in Illinois, two studies concluded that for every job created, sur-
rounding communities lost one or more existing jobs. (Illinois Business Review) In states
where legalized gambling was promoted as a way to enhance tax revenues for education,
the states actually saw education funding decrease. (Congressional Hearing. The National
Impact of Casino Gambling Proliferation: Washington, D.C.)
The real-dollar costs of legalized gambling (increased crime, poverty, broken homes,
bankruptcies, job losses, etc.) are borne by taxpayers. It takes three dollars or more spent
in other state services to offset every dollar legalized gambling ‘‘contributes’’ in taxes. (Flor-
ida Governor’s Office of Planning and Budgeting)
A study by the Wisconsin Policy Research Institute estimated that problem gamblers (and
their financially-strapped families) cost taxpayers in that state around $10,000 per gambler
per year or $307 million annually. During the same time, Wisconsin revenue from gambling
was about $63 million.
Pathological gamblers represent only four to seven percent of the population, but they
constitute 30 to 50 percent of casino profits. Like predators, casino employees identify and
target problem gamblers.
Casinos depend on impulse gambling, which is why they need ATMs and cash advance
loans to be accessible to their customers.
As Representative Anthony Brown, R-Eudora told us from the House floor, his deceased
father-in-law’s gambling addiction left him broke and broken. His family couldn’t find him
(Continued, p. 615)
in the main gambling venues. He’d been ushered into a special room set aside for problem-
atic and pathological gamblers where slot machines take $100-a-token swipes from credit/
debit cards. The ultimate in customer service!
With the advent of legalized gambling one can expect the rich to get richer, the
poor to get poorer, and the middle class taxpayer asked to foot the bill.
As seasoned gamblers know, the odds are always with the House, but I believe that with
the passage of SB 66, Kansas’ residents and all those who are sworn to protect them will
prove to be the biggest losers."
__________________________________________________________________
SENATE CHAMBER- Wednesday, March 28, 2007
(P. 606) Vote on roll call: Yeas 21, Nays 19,
COMMENTS FROM SENATORS
(P. 607)
"MR. PRESIDENT: It is with a solemn heart I vote no. This is one of the most important votes I will have cast in my 11 years of service in the Senate. We have heard a lot of talk that we cannot admit that gambling occurs in our state or what difference does it make if the gambling is in Kansas or Missouri. The difference is that crime will likely triple within three years; suicides will increase significantly. Pathological or problem gamblers will double with a casino within 50 miles. I do not want this to happen on my watch. This will forever change the face and culture of Kansas. There is no turning back. Mr. President, I vote no on SB 66."
(pp. 607-608)
"MR. PRESIDENT: SB 66, in its original version went through the Federal and State Affairs Committee and passed the Kansas Senate on a vote of 34-6. It went to the House Federal and State Affairs Committee, had hearings and was reported favorably without amendment to the Kansas House of Representatives. From there, the orderly process came to an abrupt halt! The stealth slots/casino amendment of 98 pages was served up on the floor of the House without public hearings or public comment. This chamber and its members are now voting on SB 66 as amended. I believe it is an unconstitutional bill whose economic impact is unknown. I cannot tolerate or support such a process—I vote NO."
"MR. PRESIDENT: I vote NO on SB 66. It is a bad deal for the state with less revenue that other states receive for the license fee, less money from the profits. While out of state developers will take their share of the profit to low tax states we will be left with an annual social cost of over 328 million. We could have done better. We could have created jobs when we will have a net loss in employment. While we should craft fiscal and legislative policies that will help families flourish we have sown the seeds of their destruction. We have sown the seeds for a tax increase as Kansas owned businesses see reduced income as entertainment dollars flow out of state. In a few years we will see who is right, and where the dollars flow."
"MR. PRESIDENT: I simply cannot ignore the incredible pain and personal destruction gambling has brought on individuals and families who have written to me over the past few weeks. Gambling is not simply something which can potentially only hurt the person playing the game. It is something that has proven to have the potential to destroy marriages and families, including most importantly, the lives of our children. I cannot on one hand vote for a state budget to fund programs which are meant to protect and lift up families and children, particularly those in financial need, then on the other hand vote to have state sponsored facilities which proponents even admit have the potential of hurting those very same families we are obligated to protect."
"MR. PRESIDENT: I vote no on SB 66 because I am concerned with the amount of money that comes back to the local units of government to offset the negative effects that gambling brings to a community. I have been consistent in my concerns over the past two and a half years while debating this issue that we give more money to dogs and horses than we give to people. I represent more than one county, one adjacent to a county that will potentially have casinos and will not receive any money for problem gamblers. Many times I have had people ask me why the state does not receive any money from the Indian Casinos, I simply share, someone obviously was not thinking about the social costs, I believe, in the not too distant future, citizens from our State will ask, 'why did our state give so much money to the gambling industry while, at the same time, ignore the social costs to our Kansas citizens.'"
"MR. PRESIDENT: I vote no on SB 66 and glad I won’t have to explain this to my family and grandchildren when this goes in Kansas History books."
"MR. PRESIDENT: I vote No on SB 66. Gambling is a stupid inefficient and disgraceful way for the State of Kansas to raise money. Many states are wising up and recognizing the fact that the get rich promise is a delusion. Gambling operators target the most vulnerable and poorest of citizens and these predators get richer. Governments are suppose to protect the citizens and prevent crime and corruption! It is outrageous when the Kansas Legislature encourages something that is so damaging."
"MR. PRESIDENT: The bill is structured in such a manner that Sedgewick County could vote to reject a casino and by default still have one in its backyard. I believe it is a fundamental right of the citizens of the district I represent to know the vote they cast can make a difference."
(pp. 608-609)
"MR. PRESIDENT: According to a study by William N. Thompson, Ph.D. Professor of Public Administration University of Nevada, Las Vegas titled Economic Impacts of Expanded Gaming in Kansas 'troubled gamblers cost societies money as they are prone to miss work, incur debts without repaying the money, and to take property and money that oes not belong to them. Moreover they also impose costs on society through criminal justice system and welfare activity.' Tonight, those who want to grow government won, this bill will definitely do it! I vote No on SB 66."
"MR. PRESIDENT: I respectfully vote no on SB 66. This bill will establish casinos in Kansas without providing the people of Kansas the opportunity to vote on this issue. I believe this is in direct contrast with the Kansas constitution which prohibits gambling with exceptions for the lottery, bingo, and pari-mutual wagering. The people of Kansas should be allowed to vote on the issue of expanded gambling."
"MR. PRESIDENT: I vote No on SB 66. SB 66 was never given a public hearing where the people of Kansas could comment on the bill. The 22% profit to the State is the lowest percentage negotiated in the past ten years. The State of Maine takes 61%, Rhode Island 60%, Pennsylvania 52%, and Florida 50%. The privilege fee of 25 million is not competitively bid. Any entity willing to pay more is turned away. We have given away the farm."
PROTEST
Pursuant to Article 2, Section 10, of the Constitution of the State of Kansas, we hereby
protest the passage of Senate Bill 66 as Amended by the House Committee of the Whole.
The amendment by the House Committee of the Whole to allow what are truly privately
owned and operated casinos in Kansas under the guise of ‘‘management contracts’’ is
unconstitutional, bad public policy, and injurious to many Kansans.
This bill was developed by the special interests, not in the light of day, but behind the
scenes with only a select group of legislators. This bill did not receive a public hearing at
which we, as legislators, could hear and receive the testimony, input and advice from our
fellow citizens who might question and further advise us of the impact of this bill on our
communities. We had virtually no way to hear from our citizens in hearing the total
ramifications without additional expert advice that was clearly not available to us.
The constitution of the state of Kansas states that our lottery games must be ‘‘state-owned
and operated’’. This bill only requires that the state have operational oversight of the lottery
machines; however, even its detailed provisions do not mesh with this policy statement. This
was written into the bill to try to convince our judicial branch of government that we were
following its prior decision. The Kansas lottery has no direct involvement in the operation
of table games in this bill. The contract managers will decide how many slot machines are
to be placed in each facility, how many slot machines are to be operational, what kind slot
machines, what table games are open, in addition to numerous other decisions. Who is the
operator? Not the state as required by the Constitution of the state of Kansas.
The slot machines in the casinos that are authorized by this bill will dispense the cash for
the winnings. The ‘‘contract managers’’ will receive more than 70% of the receipts after the
payouts to run their business and make their profit. These ‘‘contract managers’’ or more
accurately called, casino operators, will receive profits of more than $50,000,000 per year
for each casino, an amount far greater than what the state of Kansas, the alleged ‘‘owner
and operator’’ of the casino operation receives. This is not synonymous with a Kansas
business owner/operator who is educated about their business and then proceeds to go out
and negotiate a contract with another party that is beneficial to its business. At best, we the
state of Kansas are only a silent partner without the authority to direct operations.
The gambling interests who wrote this bill will make millions of dollars in profits on the
backs of Kansas citizens. The minimum payment to the state from these ‘‘operators’’ is only
22 percent of the receipts, after payouts. Much less than what other states receive like our
(continued p. 610)
neighboring state of Missouri that receives 27 to 28 percent and is contemplating increasing
its share, a prospect Kansas could not entertain once 15 year contracts are entered into
under this bill. In a prior bill, House Bill 2055, that was acknowledged to be written by the
gambling industry’s lobbyist, Kansas was to receive 24 percent. Consequently, in less than
a week Kansas’ unknown negotiators gave away 4 percent of its revenue. What other business
owner/operator would act in this way to its financial detriment?
The Governor appointed a special committee, the Governor’s Gaming Committee, to
study how gambling should be expanded in Kansas. This committee advised the Kansas
legislature to first create only one destination casino in Wyandotte County and then to
proceed in other areas of Kansas after conducting the appropriate feasibility studies. The
Kansas Lottery contracted with Christiansen Capital Advisors, LLC for a study of gambling;
however, that study did not do an economic impact assessment of the effect of gambling on
Kansas communities as a whole. An interim legislative committee did a study in 1995, but
the legislature did not follow up on its recommendations. To date, the Kansas legislature
has not contracted with any experts to provide it with independent advice as to how Kansas
should structure its law if it chooses to expand gambling. The Kansas legislature has not
sought legal advice to determine if the privately operated casinos that would be authorized
by Senate Bill 66 would in fact be constitutional in light of the Kansas Supreme Court’s
earlier ruling that required all gaming operations in Kansas to be ‘‘state-owned and
operated.’’
Last year, the Kansas legislature received a study conducted by Dr. Bill Thompson,
University of Nevada at Las Vegas, about how to expand gambling in Kansas. Most of his
suggestions were ignored. Instead, a coalition of legislators appear to have entered into a
pact with the casino industry to approve the bill the industry wrote which previous studies
had warned against. The public policy issues raised when the amendment to Senate Bill 66
appeared on the House floor for the first time for public review were addressed with closed
ears, as all amendments, regardless of merit were defeated, particularly those that sought
to strike a fair allocation of the gambling profits. A few of the fairness amendments the
House added were later removed by parliamentary maneuvers in order to lock in the
gambling industry’s position. The Senate was presented with a bill that could not be
amended.
Kansas now becomes the only state in the nation to create the facade of owning and
operating casinos. This bill does not fit the legal requirements of our constitution, that
requires a ‘‘state-owned and operated lottery’’. Despite the arguments of gambling
supporters that economic development would result, no studies were conducted to show
that Kansas will be the beneficiary of any new economic development from at least two of
the four proposed casino locations. Testimony presented on other proposed legislation
indicated that economic development would not occur; however, the testimony was
dismissed.
The proponents were quick to state that Kansas would receive income from gambling;
however, the same proponents had no information about the revenue Kansas, its large and
small businesses, and its citizens would suffer when millions are removed from our existing
economy through gambling losses and profits taken to low tax states. The proponents also
had no information about the state’s costs associated with the expansion of gambling. It is
well known that increased gambling does result in more bankruptcy, embezzlement, theft,
insurance fraud, divorce, suicide, and criminal activity which increases our costs of
governmental operations, not to mention what individuals and businesses must pay from
their own pockets as a result of gambling and the loss of tax revenue from existing businesses
that will lose income to casinos.
In conclusion, we protest the enactment of Senate Bill 66 because it lacks the honesty
Kansans demand of their public officials. It was passed pursuant to a seriously flawed process
that denied the public its right to know what was going on behind closed doors. It is
inherently unconstitutional. While it may be in the best interest of the gambling proponents
who wrote it, it truly is not in the best interests of the state of Kansas and our citizens.
Respectfully submitted.
Useful Links and Fact Sheets
· Focus on the Family's Gambling Homepage
· National Gambling Impact Study Commission Homepage
· Research, Testimonies And Articles From The Experts
· Quick Facts: Gambling and Suicide
· Childhood and Adolescent Gambling
· Gambling and Bankruptcy
· Gambling and Organized Crime
· Gambling Availability and Addiction
· Gambling's Impact on Families
· The Impact of Racinos
· Video Lottery Terminals (VLTs) and Electronic Gaming Devices
· Pastors: Speak From The Pulpit About Gambling Issues
· Biblical Stewardship Parables
· Focus on the Family Position Statement on Gambling
· Indian Gambling Fact Sheet
· Tribal-State Gaming Compacts (IGRA, 25 USC)
· History of American Indian Law and Gambling
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