The Kansas Supreme Court has affirmed the constitutionality of the Kansas Expanded Lottery Act (KELA), finally clearing the way for the establishment of four lottery-owned commercial casinos in the Sunflower State.
KELA, which had been passed in the state legislature last year, was undergoing a “friendly lawsuit” filed by the state’s attorney general to make certain it was completely legal. Questions had been raised about whether the proposed casinos were truly owned by the lottery since they would be operated by gaming companies. The 1986 law that legalized the Kansas Lottery states gaming enterprises, outside of parimutuel racetracks, can only operate if owned by the state.
The Court, in a 22-page unanimous opinion, ruled that “while the state is not the exclusive owner and operator of all aspects of the lottery enterprise under KELA, the state owns and operates the enterprise itself and owns and operates key elements of the lottery,” thus complying with 1986 constitutional amendments.
The Court also ruled that several key provisions in KELA bring the act into compliance with the 1986 amendments. “The payment of gaming revenues directly to the state, the ownership by the state of software licenses, the central monitoring of electronic games, and the authority to enter into management contracts and to supervise the managers constitute substantial indicia of ownership by the state and concomitant operation,” the Court ruled.
Officials within the casino-friendly administration of Gov. Kathleen Sebelius were pleased with the ruling.
“This was a critical constitutional question for the Kansas Supreme Court,” said Attorney General Stephen Six in a prepared statement. “Because the law withstood our vigorous challenge, economic development and investment can begin across Kansas.”
The ruling also cleared any lingering doubt some in the gaming industry had about Kansas casino development.
“This is another significant advancement toward the ultimate step of developing tourism and economic benefits to Kansas through the destination casino facilities,” said Clark D. Stewart, president and CEO of Butler National, which is competing for the Southwest Gaming Zone license. “The Court’s decision reinforces the will of the people of Kansas.”
The next step is for the Lottery Gaming Facility Review Board (LGFRB) to determine the gaming operators who will have the rights to construct and operate a casino in four pre-determined Gaming Zones-Southwest (Ford County), Northeast (Wyandotte County), Southeast (Cherokee County) and South Central (Sumner County). Final licensing decisions are scheduled for September.
In addition to Butler National, a number of other gaming developers have already submitted proposals and a multi-million dollar “privilege” fee to the LGFRB including Golden Heartland, Kansas Entertainment (Hard Rock & Kansas Speedway), PNK-Kansas (Pinnacle Entertainment), Legends Sun, Sands Kansas, Kansas Penn Gaming, Penn Sumner, Marvel Gaming and Dodge City Resort and Gaming.