Kansas exposes the cracks in America’s sportsbook system
Kansas has lit the fuse under its own sports betting market. A last-minute state budget provision has barred the renewal or renegotiation of sportsbook contracts until June 2026, prompting uncertainty over the future of all six operators currently licensed in the Sunflower State.
The new law passed on the final day of Kansas’ legislative session. It overrides Governor Laura Kelly’s veto and prohibits the Kansas Lottery from spending any state funds on contract extensions with sportsbook operators. This decision has flung the market into a legal grey zone. Sports betting remains legal, but all current contracts are set to expire by 2027. Time unravels quietly in Kansas, where contracts sleep with one eye open and the future flickers like a dying bulb.
FanDuel, DraftKings, BetMGM, Caesars, ESPN Bet and Fanatics currently hold licences through agreements with four land-based casinos. Those deals last until August 2027. Unless lawmakers reverse course, each operator will be forced to shutter operations once those agreements end.
Low taxes trigger frustration in Kansas
Kansas launched sports betting in 2022 under Senate Bill 84, boasting one of the lowest tax rates in the country. The state taxes operators at just 10 percent, and operators can fully deduct promotional credits. That meant Kansas collected just 3.9 percent of gross revenue in the first year.
Lawmakers have grown restless. Representative Barb Wasinger, who led the charge for the budget clause, argued that contract extensions were already in motion without addressing the flawed revenue model.
“We are one of the states with the lowest amount of money that we’re getting from sports wagering,” Wasinger told a House committee. “It’s not helping Kansans.”
The Kansas Lottery warned this freeze could trigger legal headaches. Director of Gaming Keith Kocher said operators built their platforms based on expected tax terms. Changing those now, mid-contract, risks triggering lawsuits or compensation claims.
Fear of a single-operator sportsbook model grows
The Kansas amendment does not ban sports betting, but it leaves the market exposed. With all future licences frozen, some fear lawmakers are setting the table for a state-run or single-operator model. Similar setups in Washington, DC, and Oregon have underperformed, limiting consumer choice and slashing tax revenue.
Brendan Bussmann, managing partner at B Global Advisors, pulled no punches. “Apparently, in the red state of Kansas, they want to figure out how communism doesn’t work again,” he said.
Meanwhile, neighbouring Missouri is preparing to launch its mobile sportsbooks. If Kansas fumbles its framework, cross-border leakage is all but guaranteed.
Sportsbook operators and lobbyists fight back
Industry groups, including the Sports Betting Alliance (SBA) and iDevelopment and Economic Association (iDEA), have condemned the Kansas budget manoeuvre. The SBA, which represents four of the state’s six operators, noted that current contracts still run through 2027. But the deeper message was clear: Kansas is risking its regulated market.
“This is reckless budget manoeuvring that threatens to pull the rug out from under a successful, regulated sports betting market,” said John Pappas, state advocacy director at iDEA.
The fear is that when contracts expire, Kansas could become a digital dead zone, pushing bettors toward illegal offshore sportsbooks with no tax contributions or consumer safeguards.
U.S. sportsbook policies create unstable markets
Kansas is not alone in making sudden moves. Illinois recently introduced a progressive tax scale reaching up to 40 percent. Ohio doubled its sportsbook tax rate to 20 percent within a year of launch. Maryland and Massachusetts have both considered steep hikes. Even at the federal level, the SAFE Bet Act threatens to add new oversight and restrictions.
Add to that the federal Wire Act’s ban on interstate betting, and sportsbooks face a minefield of localised rules, rising costs and political meddling. Inconsistent state policies make long-term planning difficult and deter investment in new markets.
Even as some states, like Mississippi, cannot move forward on mobile betting or sweepstakes bans, others are slamming the brakes on existing frameworks. Kansas is the latest to trade regulatory stability for uncertainty, putting functioning sportsbook agreements on ice despite industry success.
Louisiana, meanwhile, is going after sweepstakes casinos with sweeping legislation and criminal penalties. From freezing legal sportsbooks to outlawing grey-area gaming, states are redrawing the betting map faster than operators can keep up.
From experimental to unstable terrain
Sports betting in the U.S. began with fanfare and freedom. But recent moves in Kansas show how fragile that progress has become. What started as a low-tax success story is now veering toward disruption, uncertainty and regulatory overreach.
Kansas may not shut down betting tomorrow. But its decision to freeze contracts sends a message far beyond state lines: in America’s fragmented sportsbook system, even legal status offers no guarantee of longevity.
The industry may be growing, but the foundation is cracking. And for operators in Kansas, the clock is ticking.
