TOPEKA—The state Supreme Court today upheld the constitutionality of the 2007 Kansas Expanded Lottery Act (KELA).
The Court, in a 22-page unanimous opinion authored by Justice Eric S. Rosen, said that “while the state is not the exclusive owner and operator of all aspects of the lottery enterprise under KELA, the state owns and operates the enterprise itself and owns and operates key elements of the lottery,” thus complying with 1986 constitutional amendments.
The Court ruled that several key provisions in KELA bring the act into compliance with the 1986 amendments, which also led to legislation allowing horse and dog racing and enabling a state-owned and operated lottery.
“The payment of gaming revenues directly to the state, the ownership by the state of software licenses, the central monitoring of electronic games, and the authority to enter into management contracts and to supervise the managers constitute substantial indicia of ownership by the state and concomitant operation,” the Court ruled.
Justice Rosen noted in today’s decision that the framers of the Kansas Constitution “conscientiously determined that prohibiting lotteries forever was a method of promoting a sound basis for the welfare and growth of the state.” He said similarly the 1986 amendments to the Constitution appear to be based on the voters intention to “allow closely regulated gambling and to raise money for the state.”
“The intention underlying both Section 3 (the original constitutional provision) and Section 3c (the 1986 amendments) involves promoting economic welfare and growth of this state. This unity of intention compels us to read [the amendment] to favor the constitutionality of legislation purporting to create a state-owned lottery, as we have read [the original constitutional provision] to foreclose gambling schemes in the past,” the decision states.
The Court rejected a secondary contention by the attorney general that the 2007 legislation constituted an improper delegation of power by the legislature to the casino managers. The attorney general argued that the “state has surrendered so much operational discretion to private managers that those managers will exercise legislative functions, which are constitutionally reserved to the legislature.” But, the Court said it is “impractical for the legislature to exercise power in detail.”
“The extensive terms of KELA detailing the purpose, authority, and restrictions on the Racing and Gaming Commission belie any improper delegation of authority,” Justice Rosen wrote.
“The statutory scheme, when read in its entirety, shows that these direct statements of ownership and operational control are not mere verbal camouflage. KELA mandates that the Kansas lottery shall be the licensee and owner of all the software programs used at the lottery gaming facilities for all lottery games,” he said.
“Ownership and operation are flexible concepts. This Court will read a constitutional provision so as to carry out the intention of the citizens when they enacted the provision, and the Court will read a statute with a presumption of constitutionality,” the Court concluded. “The legislature and citizens amended the Constitution in order to provide a mechanism for raising revenues for the state and for promoting economic growth, goals that KELA is structured to accomplish. KELA, while not providing for total and unambiguous ownership and operation by the state, contains sufficient indices of ownership and control for it to comply with the constitutional mandate.”