In 2007 the state of Kansas legalized commercial casino gambling in four distinct geographic zones in the state and the state’s three greyhound and horse racing tracks. However, the legislation was not equal for all. While the tax bite on the casinos was 22%, the tax on the slot parlors at the tracks was 40%. With the other fees and operating costs, the state’s struggling Thoroughbred/Quarter Horse track, The Woodlands, determined that it would not be able to operate profitably. Since 2008 the track has laid dormant.
On February 10, 2015, legislation introduced by the state Senate Committee on Federal and State Affairs on behalf of the Kansas Thoroughbred Association and Kansas Quarter Horse Racing Association looks to breathe life back into the state’s racing industry. The bill, SB 192, is designed to relieve the fiscal burden placed upon racetracks by lowering the state tax to 22%, the same as the casinos, in order to spur new investment into the state’s racing industry. Another 14% of revenue is going to be set aside for purse enhancements while 1% will be used to fund a fair meet at Eureka Downs. The Woodlands would have to operate a minimum of 60-days of live racing.
According to the website Kansans for Equine Opportunity, the impact of the loss of racing has been significant.
A $375 million dollar annual business, the horse racing industry brings significant economic benefits to a state. The loss of horse racing in Kansas has resulted in detrimental loss as the absence of horse breeding, use of veterinary services, purchase of feed, trailers, tack and other associated items has been severely minimized without operational racing facilities.
The bill had its first hearing on Friday, March 5, before the Committee on Federal and State Affairs.
“Folks actively engaged in racing today are doing so outside the state of Kansas, fostering none of the economic benefits associated with a vibrant horse racing culture,” Senator Steve Fitzgerald (R-Leavenworth) said before the committee. “Millions of dollars leave the state because we passed legislation that broke these businesses.”
Fitzgerald’s district includes The Woodlands.
The KTA and KQHRA also spoke in favor of the legislation.
While much of the testimony was positive, not all witnesses spoke in favor of the legislation.
Whitney Damon, a lobbyist representing the existing gaming locations in Kansas argued against the proposed changes that would put the existing casinos “at a competitive disadvantage”. The most likely affected property would be Penn National’s Hollywood Casino at the Kansas Motor Speedway, located six miles from the Woodlands.
A study conducted on behalf of casino trade organization American Gaming Association by Oxford Economics stated that the three state-owned casinos in Kansas contributed $673 million to the state’s economy and supported approximately 4,000 jobs in 2013.