Lawmakers eye gambling rules

Some Kansas lawmakers want more say in the rules the Kansas Lottery is creating to implement the state's new expanded gambling law.

The lottery already has made rules about the casino contract process and slot machine distributions. It is operating under a temporary system that doesn't require it to bring the new rules before a joint House and Senate committee for review.

The lottery normally is permitted to use temporary rules because most of its games are of such short duration that the rules wouldn't make it through the review process before the games end.

But some members of the legislative committee think casino games and slot machines are more important than normal lottery games and ought to be reviewed by the committee.

"There's some of the guys that believe there is a big difference between a lottery game that runs six weeks, and running a poker table or craps table or a roulette table and slot machines," said Rep. Arlen Siegfreid, R-Olathe, a member of the Joint Administrative Rules and Regulations Committee. "We believe those should be run by permanent rules and regulations."

Under the permanent rules process, agencies bring rules to the committee for review. The committee can't change the rules, but it can ask questions and make sure the rules comply with the intent of the law. Then the committee submits them to the attorney general's office.

Ed Van Petten, the lottery's executive director, said the new gambling law, SB 66, allows the lottery to use temporary rules to implement it.

"It seems kind of silly to me to be second-guessing the 2007 legislative session after it's over," he said. "SB 66 makes it clear we're exempt."

Van Petten said the bill requires the lottery to submit its gambling rules and regulations to the attorney general's office. The lottery also answers to Gov. Kathleen Sebelius, Van Petten said.

The lottery will own and operate the games under the new gambling act, setting rules for how blackjack dealers deal, for changes in slot games, and for background checks on dealers, for example.

But, he said, the Kansas Racing and Gaming Commission will regulate the new facilities, including oversight of security and internal controls, and background investigations of employees and contractors. That commission has to adopt permanent rules and go before the committee, Van Petten said.

"I think what they don't understand is that we are the only ones given that temporary authority," Van Petten said.

Siegfreid said he is thinking of asking the rules committee at its next meeting, on Aug. 14, to propose that the full legislature amend Senate Bill 66 to require the Lottery to go through the full review process.

"We just feel that destination casinos should be run on permanent rules and regulations," he said. "A blackjack game is not going to change."

Siegfreid said he doesn't think the lottery is up to anything suspicious. He just wants it to be accountable to the committee.

Carl Holmes, R-Liberal, chairman of the committee, agreed.

"We're not saying they're doing anything wrong, but on the other hand, I don't think it would hurt for them to come to us and explain what's going on," Holmes said.

Rep. Brenda Landwehr, R-Wichita, said she's disturbed that the regulations are moving forward without input from the Legislature or the public.

"I've got a problem with that," Landwehr said.

The standard procedure for new state regulations would include one or more public hearings, review by the attorney general and a vote of the Legislature. While the Legislature can't stop the regulations, a negative vote there would usually be enough to send it back for a rewrite, she said.

And in rare cases, the Legislature has blocked some regulations by cutting off the funding to implement them, Landwehr said.

Public scrutiny and legislative oversight are especially needed in gambling regulations because of the potential for fraud in moving hundreds of millions of dollars through the casinos, she said.

"The lottery had its problems with fraud," she said, "and this is way bigger than the lottery."