Kansas Lottery projects higher gaming revenue; sports-wagering contracts due 2027
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Summary
The Kansas Lottery told the budget subcommittee its FY2026 revised revenue picture increased by consensus estimates and pushed larger shares to casino facility managers; sports wagering generated $172.8 million in FY2025 with facility managers retaining about 90% and contracts slated for renewal in August 2027.
The Kansas Lottery told the Committee on General Government Budget that revised revenue estimates have raised the agency's FY2026 all-funds total and increased amounts retained by third-party casino managers.
Molly Pratt, a fiscal analyst with the Legislative Research Department, told members the agency expended close to $550,000,000 in fiscal 2025 largely because of contractual payments to facility managers and other vendors. She said sports wagering revenue in FY2025 totaled $172,800,000, with about $157,300,000 going to facility managers and roughly 10% remaining with the state for distribution to funds such as the Attracting Professional Sports to Kansas Fund, the Lottery Operating Fund, the White Collar Crime Fund and the Problem Gambling and Addictions Grant Fund.
"The sports wagering contracts with the facility managers are up for renewal in August 2027," Pratt said, noting a proviso in last year's budget that prohibited the lottery from expending funds to negotiate renewals through the end of FY2026.
Steven Durell, the lottery's executive director, told the committee Kansas's structure is distinct because the state owns and operates casino gaming while third-party managers run facilities. "We are the only state that own or operate casino gaming in the country," Durell said, and he described a mixture of revenue streams from traditional lottery sales, casino gaming and sports wagering that require active management and marketing.
Members pressed for more detail on how transferred lottery dollars are spent. Representative Riley asked for historical balances in recipient funds such as the Problem Gambling and Addictions Grant Fund so the committee can determine whether transfers are accumulating rather than being spent. Pratt provided the committee with near-term balance figures: about $1.1 million in the problem-gambling fund after FY2025, an expected balance forward of $866,000 at the end of FY2026 and an estimated $580,000 at the end of FY2027, and she offered to provide additional multi-year balances after the meeting.
Lawmakers also questioned staffing and pay tied to product expansions. Pratt identified a $165,000 request from the Lottery Operating Fund to increase employee pay to match duties created by PlayOn and iLottery expansion; Durell said the agency has 84 filled positions and about six unfilled roles and that hiring for specialized positions has been difficult.
The committee did not take a vote; members requested additional historical revenue data from the consensus revenue estimating group and from the lottery for the state's casinos to analyze trends and local impacts.