Sports Betting Revenue May Be Used to Lure Chiefs to Kansas

• A bill amending the Kansas STAR bond program has been signed into law by Gov. Laura Kelly (D)
• STAR bonds are now available to fund construction of a new stadium for the Kansas City Chiefs or Royals for up to 70% of the total cost
• The bonds would be paid back through tax revenue at the stadiums or retailers around the stadium, plus future sports betting and lottery revenue

Millions in Kansas sports betting revenue may soon be earmarked to lure Patrick Mahomes, Andy Reid, and all the other Kansas City Chiefs over the border into the state.

Kansas Gov. Laura Kelly (D) recently signed bill HB 2001 into law, which amends the STAR (Sales Tax and Revenue) bond program to potentially fund the future construction of a Kansas City Chiefs or Kansas City Royals stadium in the state.

STAR bonds are funded through future tax revenues at the stadiums, tax revenues from retailers around the stadium, and millions in sports betting and lottery revenues.

Chiefs and Royals Considering Move

According to The Kansas City Star, representatives from both the Chiefs and Royals praised the new legislation and the options it provides.

“We support their efforts to expand the existing program and congratulate them on passing the legislation in special session. We look forward to exploring the options this legislation may provide,” the Kansas City Chiefs wrote in a statement.

The bill amends STAR bonds to allow for the funding of one or two major professional sports complexes in the state. It allows bond funding for up to 70% of the total costs of the sports complexes, with all other STAR bond projects limited to just 50% of the total costs. The remaining 30% of the project costs would be provided by developers.

The bill now earmarks any lottery and sports betting annual revenues in excess of $71.49 million to pay off a STAR bond. Fiscal estimates show this would likely be about $10 million annually to pay off any STAR bonds.

A new Chiefs stadium complex is estimated to cost more than $2.5 billion, while a new Royals complex is estimated to cost more than $1.5 billion. The vast majority of the costs for these stadiums would be paid off by future tax revenues brought in by the stadium complexes, while sports betting and lottery revenue would be a drop in the bucket.

Missouri Rejected Tax Proposal for Stadium

Funding for a new Chiefs stadium and rumors of a potential relocation have been floated for years. In a 2022 public hearing, Missouri senators questioned Anne Scharf, Vice President, Hunt Family Foundation and Civic Affairs at Kansas City Chiefs, after rumors materialized that the Chiefs were considering options to relocate the team.

Rumors were floated during the 2022 NFL meetings after President Mark Donovan commented that the Chiefs were exploring all options for the team’s future, including building a new stadium next to Arrowhead or moving the franchise out of state.

Arrowhead Stadium currently has a lease in Missouri that runs through 2033.

However, two months ago Missouri voters in Jackson County rejected a 40-year, three-eighths cent sales tax proposal to keep the Chiefs and Royals in Missouri. Both teams dedicated to remain in the state if the proposal had passed.

The proposal was defeated by county voters, so now it seems like all options are back on the table.