TOPEKA — A New York Times investigation into the gaming industry’s bare lobbying efforts provides a glimpse into the concessions Kansas lawmakers made when legalizing sports betting earlier this year.
Among revelations from the report, released Sunday as part of a series on “a relentless nationwide campaign” to expand sports betting: Kansas lawmakers lowered an already generous tax rate from 20% to 10% and exempted some bets from the tax altogether Taxation, ahead of the sports betting package being passed after midnight in the final hours of the legislature.
The final vote came two days after a lobbying event that promised “something for everyone.” There, the New York Times documented how Rep. John Barker, an Abilene Republican who helped orchestrate the sports betting package, luxuriated in 30-year-old Irish whiskey while Sen. Jeff Pittman, a Leavenworth Democrat, splurged on an extra bag Honduras secured cigars. At the party, Pittman called it a “terrible” bill, but he voted in favor of it anyway.
After the law went into effect in September, the Kansans put in $350 million in the first two months — bringing in just $271,000 in tax revenue.
Max Kautsch, president of the Kansas Coalition for Open Government, said the New York Times report “highlights the need for greater transparency in the legislative process.”
“Kansans should be disappointed to learn this holiday season that our leaders at Topeka are more interested in providing unprecedented tax breaks to the gaming industry than performing their fiduciary duties as good stewards of public funds,” Kautsch said.
The Sports Gambling Package is an example of transparency concerns with the last-minute avalanche of bills passed by lawmakers in the closing days of session, often with unexamined policy provisions inserted under pressure from dark interests.
Kansas Reflector has previously reported on this practice, which aims to avoid public scrutiny.
“Perhaps if Rep. Barker and his allies feared their constituents would learn of these acts against the public interest in real time,” Kautsch said, “rather than months later as a result of a statewide investigative report that decided to publish an article altogether.” Thousands upon thousands of words with an anecdote about whiskey and cigars in the Kansas Statehouse, they would think twice before leaving us with lumps of coal every legislature.”
The flyer for a lobby event on April 26 invited all 165 MPs and guests of honor to enjoy prime rib, seafood, desserts, wine, craft beer, fine cigars, vintages, single malt Scotch and single barrel bourbon.
Twenty-one lobbyists sponsored the event, titled Cigars, Cars and Bars, at the M&D Classic Car Storage a few blocks north of the Statehouse on Kansas Avenue.
A reporter and photographer for the New York Times found Barker with Redbreast Irish whiskey and a Don Tomas Honduran cigar.
“They have a special bottle for me up there – they know I like it,” Barker told the Times. “I’m in my element with a whiskey and a cigar.”
John Federico, a powerful lobbyist who helped sponsor the gathering, told the Times it was a social event, not a lobbying event.
Kansas laws give lobbyists and lawmakers ample leeway — and make it virtually impossible for journalists or the public to document the impact of such an event.
If every lawmaker is invited, lobbyists don’t have to report expenses on expense reports to the state ethics committee. Rules restricting gifts to lawmakers provide exceptions for food and beverages.
And while Kansas law prohibits gifts costing more than $40, the cost of a gift can be split evenly among fellow sponsors to keep it below the legal limit. For example, a group of 10 lobbyists could give a lawmaker a $300 gift — say, an expensive bottle of whiskey — without breaking the law.
If the cost of lobbying a legislator is less than $2, it does not need to be reported. For an event with 165 lawmakers and 21 sponsors, the threshold would be $6,930.
Hit the jackpot
The fingerprints of the gambling industry were on almost every page of the 50-page sports gambling bill, the New York Times reported.
Barker and other leaders in the Legislature agreed to halve the proposed 20% tax rate — which is already significantly lower than the tax rate in other states. The bill also allows gambling companies to deduct “free bets” and other promotions from their taxable income.
None of the $271,000 in taxes the state took on the first $350 million in bets will go to fight gambling addiction.
Instead, lawmakers agreed to allocate most of the revenue to building a sports facility. The shady idea of luring the Kansas City Chiefs across state lines came from real estate developers who own 400 acres of land near the NASCAR track, Sporting Kansas City football stadium and Hollywood Casino on Kansas City’s West Rim.
The sports betting package ensured casinos got a share of the action and has been expanded where sports betting is allowed, including on the racetrack and football stadium.
Barker wasn’t shy about including provisions that benefited lobbyists, including Federico, whose clients include Sporting Kansas City.
“John’s a good guy,” Barker told the Times. “I made sure they had something on our bill.”
Hollywood Casino has funneled more than $60,000 in donations to campaign accounts, the Times noted. Another $150,000 came from other casinos, lawyers and lobbyists.
Donors used shell company networks to circumvent campaign finance laws that limit the amount of money a single candidate can receive, the New York Times reported.
cover of darkness
The cigars at the “Social Event” on April 26 were so expensive that the legislature was only allowed to take three.
Pittman dispatched a helper to secure more.
“I have a little scam going on here,” Pittman joked to a New York Times reporter.
He acknowledged problems with the gambling package.
“Fact is, we don’t make that much money,” Pittman said. “It looks horrible.”
Two days later, Pittman’s “yes” vote helped the Senate pass the bill by the required minimum number of votes.
“Kansans are already betting on sports,” Pittman said during the Senate debate. “Many do it on illegal platforms that siphon money from the state. Sports betting is not for everyone. This is just another avenue for avid gamers.”
Lawmakers were forced to consider votes on a variety of legislation, including bills that had been changing rapidly, over the final two days of the session. The official statements presented to lawmakers rarely reveal the true impact of these last-minute, late-night deals, let alone the influence behind them.
The final hours of the session also included votes on the state budget, a $1.1 billion investment in the state pension system and a law that would have banned any state or local government official from mandating a mask in response to an infectious disease outbreak impose.
During the sports betting debate, opponents raised concerns about gambling addiction, the low level of state tax revenue generated and the decision to set aside most of that money for a special fund to lure the Kansas City Chiefs to Kansas.
“We’re going to destroy lives,” said Sen. Mark Steffen, R-Hutchinson. “We don’t know their names at the moment. We don’t know what they look like. But we know that will happen.”