Kentucky’s House Licensing, Occupations, & Administrative Regulations Committee moved an amended legal digital sports betting bill out of committee Wednesday, and the next stop will be the House floor.
Kentucky has long struggled to determine how or if to legalize wagering. Several bills have gotten out of committee over the last five years, but even with public and enthusiastic support from Gov. Andy Beshear, none has passed both chambers.
The latest bill, HB 551, would allow up to 27 digital platforms in addition to brick-and-mortar sportsbooks at horse racetracks and parimutuel facilities. According to the bill, adjusted gross revenue would be taxed at 14.25% for digital bets and 9.75% for retail wagers, and the Kentucky Horse Racing Commission would be the regulator.
Up until this year, Adam Koenig had been the sponsor of legal wagering and gambling bills, but he was not reelected in November. Koenig attended Wednesday’s hearing and was called out by the committee chair as a special guest at the top of the meeting. Rep. Michael Meredith, who authored HB 551, said that Koenig “laid a ton on foundation for this bill” in the previous three years.
This year’s version of the legislation focuses on sports betting and does not include online poker or daily fantasy, both of which have been tied to legal wagering efforts in the past. The General Assembly has three weeks in which it could act to bring sports betting to the state, as it adjourns March 30.
Kentuckians have been trying to bet
Meredith reviewed committee amendments to the bill, which included removing a 12-month requirement for in-person registration and allowing OTBs to offer wagering. The amendments were accepted by voice vote.
Meredith pointed to GeoComply data that shows that Kentuckians have been trying to access legal wagering in Ohio since it went live Jan. 1. He said there were 1 million attempts in January by Kentuckians to wager in Ohio and 188,000 accounts “picked out and shown to be from Kentuckians trying to be in our border states.”
When Ohio went live, it meant that six Kentucky border states — Illinois, Indiana, Ohio, Tennessee, Virginia, and West Virginia — now offer legal mobile wagering. The only border state that has not legalized is Missouri, where committees in both the House and Senate have approved bills, but it’s likely there won’t be any more movement there until after the mid-March spring break.
.@KYAlGentry didn't mince words about the logic of legalizing sports betting, but not betting on fantasy sports, in Kentucky. It's "ridiculous," he said, but they're trying scrounge up a few more votes… pic.twitter.com/y8HGZ2isma
— Chris Otts (@christopherotts) March 8, 2023
“I can’t debate anyone’s moral objections or religious convictions on this matter,” Meredith said Wednesday. He went on to say that billions are being bet from Kentucky on the black market.
“This is not a product that is not already happening — it is just happening in an illegal and unregulated fashion,” Meredith said. “And the bill we have before you just seeks to put it in a regulated, legal marketplace so we protect the people of the commonwealth.”
Meredith also said the bill’s fiscal note suggests that the state would take in $23 million per year in sports betting tax revenue. He said that while it’s “not a huge amount … that’s $23 million that is either not being given to any government or is being given to our border states.”
Groups with longstanding opposition to legal wagering — the Family Foundation and Kentucky League on Alcohol, Gambling Problems, and Substance Use Disorders — testified against the bill, contending that gambling preys on the weak and is addictive and that it’s bad public policy to endorse such an industry.
