The 21-19 vote followed a dozen hours of supporters holding the floor, preventing opponents from calling for a vote they felt would kill the bill. Approval of the House-passed bill also ended 15 years of failure by gambling promoters.
Sebelius called the bill's passage a "historic achievement" and is expected to sign it.
The measure calls for large, tourist-attracting hotel-and-casino complexes in four counties. The state would receive 22% of therevenues, which opponents said isn't enough.
Wichita Greyhound Park, The Woodlands in Kansas City, and the now-closed Camptown Greyhound Park in Frontenac would share 2,200 slot swith another 600 slots once the state signs contracts with casino managers.
The Woodlands, which conducts Greyhound racing year-round, also features the state's only horse racing venue and is scheduled to hold a 25-day Thoroughbred meet this fall.
While the state would hire private companies to manage the gaming, it would own and operate the games, likely making Kansas the first state in the nation to do so.
There are 11 states with commercial casinos, and the National Conference of State Legislatures said it's unaware of any state-operated casinos, with the exception of video lottery terminals in states like South Dakota, Rhode Island, and Oregon.
Supporters believe the new casinos eventually could generate $200 million a year in revenues to the state to be used for debt reduction, infrastructure development, and reducing local property taxes.
Doug Lawrence, a lobbyist for the Kansas Greyhound Association, predicted tracks will have slot machines by the end of the year. But gambling promoters believe casinos won't be operating for about three years.