Kansas Gambling Tax

Kansas is home to three land-based casinos as well as five Indian-owned casinos. Hosting eight profitable casinos in a state of less than 2.9 million people, the State should not want to discourage its residents from participating in the entertainment.

At least that’s what common sense tells me.

Kansas Gambling Tax

Things are not looking up for the Kansas gambling market. The state’s Senate rejected a bid to lower the state’s gambling tax on slot machines, which some say would have led to job growth. Senate 427 Bill proposed would have reformed a 2007 state law by lowering the tax from 40 percent to 22 percent. A private developer, Butler National Corporation, will build the casino and manage it, but the Kansas Lottery owns the rights to the gambling and the gambling equipment. 2009: Boot Hill Casino, in Dodge City, opens on December 15. 2011: Kansas Star Casino, in Mulvane, opens on December 20. 2012: Hollywood Casino in Kansas City opens on February 12. New Jersey has an 8.5% tax for sports bets made in person and a 13% tax for online and mobile sports bets. Nevada has a much lower tax rate of 6.75% for all types of sports bets. Personal Income Tax: Kansas Law. As of this writing (2015), Kansas is in the midst of a multi-year decrease in personal income tax rates through 2018. There are essentially two tax brackets in Kansas, one for all income less than $15,000 (or $30,000 for joint filings) and another for all additional income.

Well, the 2013 legislative session in Kansas appeared to lack some common sense when deciding to remove the gambling loss deduction from the state’s personal income tax beginning in 2014, as reported by the Topeka Capital-Journal.

Kansas Gambling Age

We know the reason for the change. States are hungry for revenue. Removing a so-called “subsidy” for an entertainment activity is an easy political sell.


Regular readers of this blog know the implications. A taxpayer with gambling winnings in Kansas will have to pay the State personal income tax on gross winnings, and cannot even partially offset the winnings via a gambling loss deduction. The result is paying taxes on “phantom” income.

Kansas gambling casinos

Kansas Gambling And Racing Commission

The article mentions that no one came forward in opposition to defend the gambling loss deduction. I’m surprised the local casino lobbyists did not make any fuss.

Kansas Gambling Casinos

The initial impact won’t be felt until April 2015, when taxpayers in Kansas have a balance due on their 2014 Kansas tax returns due to gambling winnings. All it takes is one unhappy taxpayer to make a large fuss about it. That’s when Kansans could be tempted to travel outside the state to gamble or turn to other forms of entertainment.