Legislative analysts map sports-wagering receipts: $2.67 billion wagered yielded roughly $17.4 million to state in FY25

Legislative fiscal analysts and Lottery officials told a committee how sports-wagering receipts flow across multiple funds and how recent appropriations language has directed the monthly transfers.

“Net sports wagering revenue was approximately $174,800,000,” Molly Pratt, a fiscal analyst at the Legislative Research Department, said while walking through a flowchart of transfers. She and Lottery director Steven Durrell described the pipeline from gross wagers to the state share and the statutory allocations that determine where the money moves.

Why it matters: Committee members repeatedly pressed for clarity about how much money the state actually keeps and how the retained funds are used. That matters because the statutory splits — and legislative appropriations — determine money available for problem-gambling programs, an attracting-professional-sports fund and the state’s general coffers.

Numbers presented: Fiscal testimony to the committee summarized fiscal-year totals the Lottery provided. Total wagers handled for sports wagering in FY25 were about $2.67 billion; total prizes (payouts to bettors) accounted for about $2.40 billion. After promotional deductions and federal excise taxes the Department reported $174.8 million in net revenue for the period; the state’s statutory share of that adjusted figure is 10 percent (approximately $17.4 million for FY25). Pratt told the committee how the state’s portion is allocated: the first $750,000 of sports-wagering receipts is credited to a White Collar Crime Fund, 2% of the remaining amount goes to problem-gambling and addiction grants (about $334,000 in FY25), 80% of the remainder is deposited to an “attracting professional sports to Kansas” fund (about $3 million in FY25), and the final remainder (18% of the remainder after those transfers) is credited to the state gaming revenues fund (and ultimately to the State General Fund).

Promotional deductions: Witnesses repeatedly emphasized that the law defines the state share as a percentage of adjusted revenue — after promotional credits (sign-up bonuses and free-play offers), federal excise taxes and other listed deductions. Director Durrell and sportsbook representatives said those promotional deductions were intended as marketing spend to develop and retain customers in a regulated market; analysts cautioned those deductions significantly reduce the taxable base. The Lottery told the committee that if promotional deductions were excluded, the state share since inception would have been larger (Pratt reported the Lottery’s internal estimate that the state retained approximately $36.2 million since inception with promotions deducted vs. a possible $63.7 million without those deductions).

Designated spending and questions from legislators: Legislators asked about the “attracting professional sports to Kansas” fund, which is newly established in statute and receives a large portion of the sports-wagering share. Pratt and the Lottery director said the fund has no statutory sunset and that the Department of Commerce manages that fund when awards or pledges are made. Committee members asked whether the Legislature can change a fund’s direction; witnesses confirmed the Legislature retains authority over appropriations and could alter transfers by statute.

Next steps: The committee asked staff to provide more granular breakdowns of sources (retail vs. mobile platforms, age groups and regional wagering patterns) and to follow up with KDADS and other agencies about usage of problem-gambling grants and whether revenues allocated to prevention and treatment are reaching intended programs.