The legislature reconvened on Thursday, April 26th for the start of Veto Session. The Senate voted on eight Conference Committee Reports and two bills. The Senate will continue to work until Sine Die on Friday, May 4th.
SB 427 would amend the Kansas Expanded Lottery Act and the Kansas Parimutuel Racing Act concerning racetrack gaming facilities and lottery gaming facilities. This bill sounds like it would permit horse and dog racing at the Kansas racing facilities. This is not the debate. Horse and dog racing is currently permitted under Kansas’s law. The racetracks also currently are or can be permitted to have slot machines. When the lottery act was passed years ago the racetrack agreed to pay the State and are required to pay back to the State 40% of their earnings on slot machines. SB427 would change the pay back rate to the State and would require race tracks with slot machines to pay back about 22% of their earnings to the State, the same as State owned casinos are paying. Here is where the real problem surfaces. The State has charged the operators of the State owned casinos a privilege fee to operate state casinos and they have contracts that would be violated if the State changes the payback rates for racetracks.
The Kansas Attorney General, Derek Schmidt, issued an opinion that indicated passage of an expanded gaming bill could lead to a financial liability for the State. If found in breach of contract, the State could be required to return $61 million in privilege fees to the casinos along with 10% interest from date of payment, which would approximate $130 million today. In addition there could be other possible economic damages related to breach of contract. Some proponents of SB427 do not believe the State will be sued or the damages will be over $100 million. They will also say, if they sue, the racetrack owner will payback the damages with their winnings and will put up a letter of credit. The problem with this scenario is they want to use 11% of the 22% payback to the state for their payback and the State would be paying the damages over $100 million. You may wonder why this vote was as close as it was with the Attorney Generals opinion that the State will lose the lawsuit. Many who supported SB427 live in the areas where the racetracks are located and or where many of the house and dog breeders operate.
Ever since my first day in 2011 this has been a hot issue and I believe it will be again in the future. Many of us who agree with the Attorney General’s opinion will try to work with both sides to hopefully work out a solution that will avoid breaching our contracts.
Several of the conference committee reports of particular interest to our area were SB307, the amusement ride bill. This bill was passed out of the Senate 37-1 and will go to the governor for his signature. Another bill was SB331, which would establish Little Jerusalem as a State park in southern Logan County. When we look at the vote of SB331 you might wonder why 12 voted against the legislation. Well it has nothing to do with Little Jerusalem. Part of this bill also designated the Flint Hills Trail State park located in Miami, Franklin, Osage, Lyon, Morris and Dickinson counties because there was a controversy on changes to the Flint Hills Trail State Park.
This will be the last week of this year’s session and will be a very busy week finishing up the budget and school funding, along with a number of conference committee reports to agree or disagree on.
The Treasurer’s office has announced that there is $350 Million in unclaimed property. Please check kansascash.com to see if you have any unclaimed property in the state of Kansas.
It is my honor and pleasure to represent the 40th Senate District. Please contact me at (785) 296-7399 or [email protected] with your suggestions or concerns.