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Kansas' unique casino ownership law upheld by state court

Jul 1, 2008 7:04 PM

Gaming Industry Insider by Ray Poirier | Kansas’ unique casino law that puts the state in the position of owning the casinos but permits it to lease the facilities to private operators has been validated by the state’s Supreme Court.

Gov. Kathleen Sebelius, a Democrat who supported the legislation and signed it into law in 2007, asked the state attorney general to test the law’s constitutionality and clear any potential legal hurdles.

The opponents, mostly Republican, argued the law was not constitutional because the real estate, buildings and equipment related to the gambling would be privately controlled.

"While the state is not the exclusive owner and operator of all aspects of the lottery enterprise," said the high court, "the state owns and operates the enterprise itself and owns and operates key elements of the lottery."

Among the bidders under consideration for licenses are such widely-traded public companies as Penn National Gaming Inc. (PENN), Las Vegas Sands Corp. (LVS) and Pinnacle Entertainment Inc. (PNK).

On another legal front, a state judge in Missouri is considering whether a casino-backed initiative could mislead Missouri voters or whether opponents are merely nitpicking in court to prevent a vote.

Involved is the Missouri provision that sets a $500 limit that a gambler can lose in two hours. The ballot initiative would remove that provision.

A lawsuit that opposes the referendum charges that the language used to describe the measure would confuse voters. The description says the measure would "prohibit any future loss limits." The lawsuit contends it would be more accurate to say it would "prohibit the Missouri Gaming Commission from regulating loss limits."

While the judge ponders his decision, the secretary of state’s office has been counting petition signatures to determine whether there are enough to place the issue on the November ballot.