Key Moments:
- Kansas lawmakers have been weighing a potential increase to the sports betting tax, currently set at 10%.
- In 2024, sports betting generated $216.7 million in revenue, with mobile wagers making up nearly 99% of the market.
- Past year legislative actions in Kansas and other states reflect a trend of increasing sportsbook tax rates.
Legislative Discussions on Higher Sportsbook Taxation
State officials in Kansas have initiated deliberations over a possible rise in the tax applied to sportsbook earnings. This consideration follows efforts by lawmakers in Topeka to secure a greater share of income from legalized sports betting operations, which were launched in 2022 across the state’s four commercial casinos.
Sportsbooks in Kansas are currently subject to a 10% levy on gross sports betting revenue, which places the state among those with the lowest rates nationwide. In addition, there is a 0.25% federal excise tax imposed on each bet. The existing five-year sportsbook licenses are set to expire in August 2027, and recent legislative changes have temporarily blocked automatic renewals to facilitate discussions around tax rates.
Public Hearing Highlights Differing Opinions
A recent public hearing held by the Kansas Legislature’s Federal and State Affairs Interim Committee brought contrasting views to light regarding the current tax arrangement. State Rep. Francis Awerkamp (R-St. Mary’s) voiced frustration, stating, “This has been an absolute failure,” during the meeting.
John Pappas, representing the interests of the sports betting and online gaming sectors, countered this by describing Kansas’ market as a “success story.” He maintained that the lower tax rate has empowered sportsbooks to provide attractive odds and consistent promotions, keeping gamblers within state-regulated platforms rather than seeking out offshore or unregulated options.
Awerkamp responded, “I guess we represent different people. You have your clients. I have the people of my district. The people of Kansas.”
Kansas Revenue and Tax Landscape
Kansas currently applies a 10% tax rate to both retail and online sportsbook operations, a figure that falls below most of the other 39 states and Washington, DC, that allow legal sports betting. Nevada features the lowest tax rate at 6.75%, while New York, New Hampshire, and Rhode Island impose the highest at 51%.
For 2024, the sports betting market in Kansas reported $216.7 million in revenue, reflecting a nearly 19% year-over-year increase. Mobile betting has dominated, representing almost 99% of total wagers. The state’s portion from sports betting amounted to just under $22 million. In contrast, commercial casino revenues face a 27% tax, which supplied more than $100 million to Kansas. Tribal casinos in the state do not owe any state taxes.
| Source | Tax Rate | State Share (2024) |
|---|---|---|
| Sports Betting (Retail & Online) | 10% | < $22 million |
| Commercial Casino Revenue | 27% | > $100 million |
National Trends and Consumer Concerns
Kansas is not alone in its evaluation of sportsbook taxation. Illinois has implemented two tax increases within the last year, including a per-bet cost that rises from 20 cents to 50 cents once an operator exceeds 20 million annual bets. New Jersey also raised its online sportsbook tax this year from 15% to 19.75%, a substantial climb from the initial 13% set in 2018. Louisiana elevated its tax rate from 5% to 21.5%.
Some consumer groups have raised alarms that these hikes could prompt customers to revert to unregulated offshore platforms and local bookmakers, as higher taxes may translate to less favorable odds or reduced promotional offerings for bettors.
- Author
Daniel Williams
