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Topeka — Gov. Kathleen Sebelius will propose a state-owned casino near the Kansas Speedway, but administration spokesmen said the door wasn't closing on negotiations with American Indians or others seeking to develop gambling venues.

"If this is done right, it would be a very big boost" to the economy, Sebelius' chief counsel Matthew All told the Senate Federal and State Affairs Committee on Tuesday.

He said the governor's plan would follow recommendations from a task force Sebelius appointed last year.

Glenn Thompson of Wichita, a spokesman for gambling opponents, said he wanted to see the details of Sebelius' proposal before commenting on it, but he previously stated he didn't think the Legislature would adopt an expansion of gambling.

All's testimony signaled the start of what has become the almost annual effort to expand casino gambling.

Big wheel, keep on turning

Since 1993, when riverboat casinos started luring Kansans into Missouri, lawmakers in Kansas have fought about whether to develop casinos in urban areas, tourist towns and at racetracks so the state could grab a piece of the revenue action.

Because of a state constitutional provision that prohibits privately owned casinos, the gambling venues can exist in Kansas only if they are state-owned and operated or run by American Indian tribes.

There are four tribal casinos that operate under compacts with the state, but they share no gambling revenue with the state. In addition, the Wyandotte Nation recently opened a small gambling facility in downtown Kansas City, Kan., but the state wants federal authorities to shut it down because they say it is on grounds that do not qualify for American Indian gaming.

A patron plays bingo on a gambling machine at the Wyandotte Indian Casino in downtown Kansas City, Kan. If Gov. Kathleen Sebelius gets her way, the state will build and operate a casino near the Kansas Speedway in western Wyandotte County.

No state-owned casinos exist in the United States, according to a recent gaming task force report.

All said Sebelius wanted to expand gambling in Kansas with a destination, resort-class casino in the Village West area of Kansas City, Kan., near the Kansas Speedway. And she will propose a bill within two weeks to go the state-owned route, although negotiations will continue with other interests to build a casino in Kansas City, Kan.

Committee has questions

Under a proposal for a state-owned casino, a private company would be hired to run the operation, but the state would own the facility and be in charge of setting odds and payments, All said.

State Sen. Kay O'Connor, an Olathe Republican, questioned why Sebelius didn't recommend video lottery terminals be approved for convenience stores if she wanted to raise revenue quickly. The terminals are similar to slot machines.

Governor's gaming committee report Casino expansion not sure bet (1-5-04) More gambling stories More legislative stories

All said while that would raise quick revenue, it wouldn't produce the jobs and increase in tourism like a destination casino would.

O'Connor also voiced concern that a large casino and hotel that discounts its meals would doom nearby restaurants.

All said that expanded gambling should help the economy, but he conceded "it will probably hurt some folks."

The bill also would set up a mechanism to consider casinos at current racetracks and proposals in other Kansas cities.

Tom Wright, chairman of Sebelius' task force on gambling, said the governor's proposal would not preclude an American Indian proposal from gaining acceptance.

The Wyandotte Indian casino in downtown Kansas City, Kan., is one of five American Indian-run casinos in northeast Kansas. Gov. Kathleen Sebelius will propose that the state run a casino, ideally in Kansas City, Kan., to aid a budget shortfall.

"This allows both to stay in the game," he said.

There are several tribes vying to build a casino in Kansas City, Kan., which most experts agree would be a lucrative location.

Nailing down the take

Sen. Pete Brungardt, a Salina Republican and new chairman of the Federal and State Affairs Committee, said he wanted to see the details of Sebelius' proposal.

"Gaming has to be more than just about money. It has to be integrated with the vision of the state,"such as increasing tourism, Brungardt said.

But the question of how much money expanded casino gambling would bring never has been nailed down.

"I want our take defined, so that when the dust clears, it doesn't own us," Brungardt said.

A proposal to build a casino at The Woodlands horse and dog track in Kansas City, Kan., would generate about $24 million per year to the state, according to the estimate of earlier legislation that has failed.

A tribal group, composed of the Kickapoo and Sac and Fox, has proposed building a resort-type hotel and casino near the Speedway and sharing 10.8 percent of gaming revenues with the state, an estimated $18 million in the first year and $21 million annually in later years.

"The Kickapoo and Sac and Fox have the best proposal before us," All said. "They really are the most advanced."

He said whatever the state allowed in the Kansas City, Kan., area "has to be significant because this is such a valuable site."

The presence of the Speedway; outdoors store Cabela's, which is the No. 1 tourist draw in Kansas; and other tourist destinations made the Kansas City, Kan., area the prime location for at least one major casino despite the presence of four casinos just across the river in Missouri, All said.

And he said the governor's proposal wouldn't prevent The Woodlands from landing the deal to be the destination casino "if that were the best proposal."

Sen. Chris Steineger, a Kansas City Democrat who has pushed for casino legislation in the past, said Sebelius' bill would open up competition between proposals made by American Indian tribes, the tracks and other interested groups.

"We get to see who can come up with the best deal for the state," he said.

The Sebelius gambling bill is the second announced so far this session. Last week, House Speaker Pro Tem John Ballou, a Gardner Republican, announced a proposal to allow slots at The Woodlands and the state's two other pari-mutuel racetracks, which are at Wichita and Frontenac. His measure would also allow slot-machine casinos at Dodge City and Junction City.