Kentucky Sports Betting

Background

Kentucky is well known for its long history of activities related to sports betting. This does not only include thoroughbred racing but also betting on various games as well. It all started in 1875 when the Kentucky Derby was first founded, and Kentucky became the center for pari-mutuel wagering on horse races.

When the federal government banned nationwide sports betting through the PASPA (Professional and Amateur Sports Protection Act) of 1992, was passed it took another two decades before legislators started pushing hard for the expansion of sports betting laws.

2015

In October 2015 EquiLottery was introduced. This was a game that would combine horse-race betting with the lottery. Ipsos and EquiLottery conducted a survey and it showed that 48% of Kentucky residents would be playing the game every week. This was some kind of a trial run to see how open locals would be to the introduction of new forms of sports style betting.

2017

Towards the end of the year, in September, Senator Julian Carroll filed a bill before the 2018 legislative session. His proposal, SB22, opened the debate for the regulation of sports betting in the state. The SB22 offered for the legislation of sports betting at horse racing tracks as well as betting activities if the Supreme Court invalidated PASPA. The SB22 bill would assign the regulation of the industry to the Kentucky Racing Commission and propose a 20% of the total tax on all the sports betting activities. The bill would include an initial operator licensing fee of up to $250k

2018 to Date

House representative John Sims Jr came up with HB536 in March to allow sports betting on professional and collegiate sporting events all over the state via lottery retailers, horse racing tracks and simulcast facilities. Again, like SB22, this bill was only to be considered in the event that the Federal Government repealed PASPA.

After PASPA was repealed in May, the legislators filed another bill (BR29) in June. The bill was meant to permit and regulate sports betting on collegiate and professional games except for high school-level games and below. Added in the bill, was a tax rate of 3% plus an annual license fee of $250k minus any other fees such as the integrity fee.

In the same month, the state lottery announced that they would launch an equilottery (Win Place Show).  This was based on the live results of horse racing. Price per Lottery ticket was set at $2 for participating retailers via the system that offered Powerball and Pick3.

In September, another bill, BR15 was tabled to consider options for authorizing sports betting within the state of Kentucky. What was also included in the bill was the permission to offer sports betting at horse racing tracks, simulcast and lottery retailers. The bill would also assign the State Lottery Corporation to regulate the industry. The Bill, however, did not mention any taxing information.

Senator Julian Carol filed another proposal, BR320 in November for the authorization of sports betting. Carol’s bill also proposed the creation of the Kentucky Gaming Commission to regulate the sports betting activities in the state. For taxation, his bill allowed for a 25% gross win tax on all the operators. The BR320 would permit the current Kentucky Lottery Association including all the operators to receive licenses for offering retail sports betting services as long as they complied to a licensing fee of $250k and $25k yearly renewal fee for operators.

By December 2018, the Attorney General addressed a letter to the lawmakers recommending the General Assembly to pass a bill that would expand sports betting. The letter specified that all the revenue collected would be dedicated to the Kentucky pension systems until they were fully funded.

2019

On February 5th, 2019, the HB175 was introduced. The bill was seeking to legalize sports betting, fantasy sports, and online poker within the state of Kentucky. Among the provisions of the bill, online poker sites could operate under Kentucky Lottery Commission. Furthermore, Fantasy sports operators would also need to part with $5k for an operating license from the state.

The current gambling laws only permit betting on horse races. Horse trotting races, pacing races, running races and off-track interstate betting are legal. Sports enthusiasts can also bet on fantasy sports and have fun. Kentucky state also allows its residents to bet on games of skills. This includes common online puzzle games such as Scrabble and Wheel of fortune. Just like other gambling activities, bookmaking or promoting gambling is not legal.

Next Steps for Kentucky Sports Betting

Like Indiana, Ohio, Kansas, Indiana, Illinois, Kentucky is planning to revisit the issue extensively after the November midterm elections. From the look of things, Kentucky is striving to embrace the sports betting industry, which is now on fire in the states that have already passed the regulations.

While some obstacles remain, there is a renewed optimism that the Bluegrass state could be among the 22 U.S. states that would have legalized sports betting by 2020. From the revenue that is being collected in other states, we hope that the lawmakers will see all the upsides of interactive sports betting and vote in favor of regulating the activity sooner rather than later.