Kansas AG files ‘friendly’ lawsuit on casino law

By John Hanna
Topeka, Kansas (AP)  8-07
The state’s attorney general filed a “friendly” lawsuit Thursday over a new gambling law, hoping Kansas’ highest court will permit the state to be the nation’s first to own resort casinos.

The law, which took effect in April, authorizes one casino in each of four areas and slot machines at dog and horse tracks. The Kansas Lottery is supposed to own and operate the new gambling operations, but day-to-day management would be left to private developers who’d have contracts with the state.

In his lawsuit, Attorney General Paul Morrison alleged the arrangement violates the Kansas Constitution because the state won’t be involved enough in the new gambling. The constitution permits a state owned and operated lottery, and in 1994, the Supreme Court said “lottery” was broad enough to cover slot machines and other casino games.

Morrison raised arguments made previously by gambling opponents, hoping the court will reject them. Had Morrison not attacked the law, there would be no controversy for the justices to settle.

“We think it’s a close question, and it’s one we hope that the Supreme Court will take up quickly,” Morrison said in an interview. “Even though it’s a friendly lawsuit, it’s our job to vigorously challenge that law so that the folks who are interested in investing in casinos can get the green light or the go-back-and-start-over signal.”

The court gave no indication of when it would take up Morrison’s lawsuit, but he asked the justices to hear arguments in October to “prevent excessive delay.” Morrison could file the case with the Supreme Court because he’s challenging a state official’s authority to act.

Gov. Kathleen Sebelius, a fellow Democrat and gambling supporter, asked Morrison to file the lawsuit.

“The court decision will bring certainty to the
constitutionality of the bill passed by the Legislature last
year,” Sebelius said in a statement. “We look forward to a
decision which allows the process to move ahead.”

The state started its lottery in 1987, a year after voters approved a constitutional amendment. During the 1990s, four Indian tribes with reservations in Kansas opened casinos, under a federal law that permitted them to have the same gambling as the state.

Eleven other states have nontribal casinos, but none of them own the hotel-and-casino complexes that the new Kansas law contemplates, according to the American Gaming Association. The state hopes eventually to reap $200 million a year in gambling revenues.

Sebelius had worried that developers wouldn’t want to commit to spending money to build casinos or add slot parlors at race tracks without a ruling from the Supreme Court on the law. However, the lottery commission plans to take casino applications through December and to negotiate with track owners.

“We’re moving forward as if the law is constitutional, which we believe it is,” Kansas Lottery Director Ed Van Petten said.

But in his lawsuit, Morrison said the law declares the state the owner of the new gambling operations “completely out of thin air.” He also said Kansas voters didn’t anticipate that they were authorizing casinos in 1986, when they approved the lottery.

“Rather than complying with the will of the people, the act gives the keys to the kingdom to the highest bidder – allowing, indeed requiring, the casino ‘managers’ to buy all of the land, buildings and equipment needed to run the gambling operations, then declaring by fiat alone that they belong to the state,” the lawsuit said.

Rep. Lance Kinzer, an Olathe Republican and attorney who opposed the gambling law, called Morrison’s allegations “a fair statement” of what’s wrong with the law. He said when the lottery contracts with casino managers, “I think the case is only going to get stronger.”

“There’s really no more than a wink-and-nod attempt to comply with the constitution,” he said.

Doug Lawrence, a gambling lobbyist, wasn’t bothered by the arguments in Morrison’s lawsuit. He said if Morrison hadn’t made them, someone else probably would have. The Prairie Band Potawatomi tribe, which operates a casino north of Topeka, has threatened to sue, raising the same issues Morrison did.

“We’re still going to have to have a full and robust discussion in front of the courts,” Lawrence said.

Lawrence also is confident the law is constitutional. He said supporters examined gambling laws in five other states that have lottery language in their constitutions similar to Kansas’ – Delaware, Oregon, Rhode Island, South Dakota and West Virginia.

The South Dakota Constitution permits lotteries or video games of chance “owned and operated” by that state. About 8,800 video lottery machines are in 1,400 bars, restaurants, convenience stores and other businesses, but on its Web site, the lottery there says it is “serving solely as a regulator of the games.”

The case is state, ex. rel. Paul Morrison v. Kansas Lottery and Ed Van Petten, No. 99,128.
On the Net:
Kansas Supreme Court: http://www.kscourts.org
Kansas attorney general: http://www.ksag.org
Kansas Lottery: http://www.kslottery.com