A late-session legislative decision has cast a long shadow over the future of Kansas’ legal sports betting industry. On April 11, the Kansas House of Representatives passed a surprising amendment to the state budget bill, SB 125, that effectively bars state agencies from negotiating or renewing contracts with lottery gaming facility managers for sports wagering through the 2025 and 2026 fiscal years.

Though the move does not outlaw sports betting itself, it introduces a potentially devastating limitation: the six active sportsbook operators in the state—FanDuel, DraftKings, BetMGM, Fanatics, Caesars Sportsbook, and ESPN Bet—may be unable to continue operating after their current licenses expire on August 27, 2027, unless lawmakers revise the legal framework beforehand.

The amendment stipulates that “no expenditures shall be made…to negotiate or enter into any contract or extension or renewal of an existing contract for the management of sports wagering.” This language, while not immediately disruptive, introduces major uncertainty about the long-term viability of regulated sports betting in the state.

Industry Backlash and Fears of a Market Collapse

The reaction from stakeholders was swift and critical. Jeremy Kudon, a lobbyist for the Sports Betting Alliance (SBA), which represents four of the six active operators, posted on X (formerly Twitter) that most contracts will remain valid until 2027. However, without a change in legislation, these operators would be unable to continue afterward.

“This is reckless budget maneuvering that threatens to pull the rug out from under a successful, regulated sports betting market,” said John Pappas, state advocacy director for the iDevelopment and Economic Association (iDEA), which also supports SBA-aligned sportsbooks. “It serves no meaningful fiscal purpose, but it will take dollars and consumer protections away from Kansans—pushing them toward illegal, unregulated gambling sites that pay no taxes and offer no safeguards.”

The amendment, initially vetoed by Democratic Governor Laura Kelly, was revived after the Republican-controlled legislature overrode the veto on the final day of the session. The veto had narrowly survived a first vote on April 10, but a follow-up vote on April 11 saw the measure pushed through as part of a broader veto override package.

Speculation Swirls Around Future Regulatory Models

While the amendment doesn’t explicitly aim to terminate sports betting in Kansas, it has opened the door to significant restructuring. Sources suggest that some lawmakers may be eyeing a shift toward a more restrictive system, potentially modeled after the now-repealed single-operator framework once used in Washington D.C.

That model had long been criticized for its lack of competition and underwhelming performance. When D.C. finally opened its market to multiple operators in July 2023, revenue and user engagement markedly improved.

Brendan Bussmann, managing partner at B Global Advisors, voiced his skepticism regarding such approaches. “Apparently in the red state of Kansas, they want to figure out how communism doesn’t work again,” he remarked according to iGaming Business. “You see what you get with stability in driving revenue.”

Industry analysts have echoed these sentiments, warning that single-operator models generally produce less revenue and foster black-market betting. In 2024, states with one sportsbook operator averaged just $45 per adult in revenue, compared to $92 per adult in states with four or more operators.

Revenue Growth Amid Regulatory Turbulence

Despite the looming uncertainty, Kansas’ sports betting market continues to post steady financial figures. In March 2025, the state recorded a betting handle of $248.4 million and revenue of $8 million—a 12.4% year-on-year increase in revenue, despite a slight 1.7% dip in handle. That month, the state collected $803,000 in taxes, bringing its fiscal year total to $13.1 million.

However, some lawmakers remain dissatisfied with these returns, especially given the state’s relatively low 10% tax rate on sportsbook revenue—among the lowest in the country. The initial 2022 sports betting legislation had envisioned a highly competitive market tied to Kansas’ four state-managed casinos, with the potential for up to 12 sportsbook partners.

Now, critics argue that financial expectations haven’t been met, fueling discussions around tax hikes or alternative regulatory structures. Similar tax reform trends are already playing out elsewhere. States like Illinois, Ohio, and Maryland have all increased tax rates in recent years, and Massachusetts is even considering a staggering 51% rate.

Looking Ahead to 2026 and Beyond

The prohibition on sportsbook license renewals is set to expire on June 30, 2026, meaning the Kansas legislature could revisit the issue during the 2026 session. Whether lawmakers decide to allow renewals, transition to a new model, or extend the prohibition remains to be seen. For now, with the 2025 session closed, no new reform bills have been introduced.

The ongoing shake-up in Kansas mirrors a broader trend across the U.S. sports betting landscape, as both state and federal lawmakers reconsider regulatory and tax frameworks. With federal proposals like the SAFE Bet Act looming, which would shift regulatory oversight to the national level, Kansas may just be one part of a larger movement reshaping how Americans place their bets.

As Bussmann put it, these mounting regulations are “further amplifying the illegal market that has thrived for decades not paying taxes while harming people that want to do business regulated and through legitimate suitability.” Whether Kansas will reaffirm its commitment to a competitive, consumer-friendly betting environment or move toward a more limited, restrictive system remains a question that won’t be answered until 2026.