House Status:
Senate Status:
Senate Status:
Minutes for SB535 - Committee on Federal and State Affairs
Short Title
Exempting certain gaming suppliers from the certification requirement of the Kansas expanded lottery act when such suppliers do not contract with the state or the lottery gaming facility manager.
Minutes Content for Mon, Mar 18, 2024
Jason Long, Office of the Revisor of Statutes, gave an overview of the bill. SB535 creates a statutory exemption from the requirement for vendors that supply goods and services to casinos to be certified for compliance with standards for security, fitness, and background investigations. The new provision would exempt manufacturers and suppliers who:
- Manufacture or supply goods or services to a person who is required to be certified by the Kansas Racing and Gaming Commission (KRGC);
- Does not propose to contract directly with the state or any casino or racetrack to provide the goods or services; and
- Does not perform any work or services on the premises of any casino or racetrack. (Attachment 5)
After a period of questions and answers, the Chairman called for proponent testimony.
Proponent Oral Testimony
Josh Ney, Kriegshauser Ney Law Group, spoke as a proponent of the bill. He stated the bill addresses regulatory overreach and the targeted interpretation and enforcement by KRGC of an isolated regulation against Hydeman Company, Inc., who has been supplying, installing, and servicing cash counting machines to the state since 2012. He stated the KRGC contends that even though Hydeman Co. itself is certified, the manufacturer of the cash counters has to also be separately certified. They are asking for a simple clarification of statutes, and for a level playing field. (Attachment 6)
Josh Hydeman, Hydeman Company Inc., spoke as a proponent of the bill. He gave a brief history of the company, which is a distributor of bill counters to banks, grocery stores and casinos. He said they have sold to the casinos for over 12 years, but are no longer authorized to sell in Kansas, even though the statute had not changed, and the equipment had not changed. They were told by KRGC in the fall of 2023 that the manufacturer of the bill counters they sell, needed to become separately licensed because the counting machines are "gaming devices". They believe if they have to apply for certification of the bill counters, the same should be required for all equipment used in casinos such as printers, software, etc., and they are seeking help from the legislature with the inflexible, flawed logic of the KRGC. (Attachment 7)
Following a period of questions and answers, the Chairman called for opponent testimony.
Opponent Oral Testimony
James Bain, Kansas Racing and Gaming Commission, spoke as an opponent of the bill. He stated the bill creates a loophole for manufacturers of products used on the gaming floor, or that will interface with casino or Lottery systems. He said there are different licenses for non-gaming and gaming categories, and non-gaming equipment is subject to lower standards than slots, dice, ATMs, and other financial technology. The manufacturers of gaming equipment are subject to background checks of stockholders, key employees, and the certification that they operate in a fair and honest manner. He said SB535 would allow manufacturers to hire third party vendors to sell their products to the casinos and avoid the licensing. (Attachment 8)
There was no neutral testimony.
Following a period of questions and answers, the Chairman closed the hearing on SB535.
