When Kentucky on March 31 became the first state in 2023 to legalize sports betting, the clock started ticking. And less than two weeks later, politicians are already using sports betting as a political football and pointing to what could be unreasonable launch dates.
Gov. Andy Beshear, long a supporter of legal wagering, suggested last week that Kentuckians would be able to place bets by football season. Senate Majority Leader Damon Thayer, who shepherded wagering through the legislature, also pointed to a fall launch.
Republican gubernatorial candidate Alan Keck, meanwhile, told the Associated Press that he wants to change where revenue is routed from the new law. Instead of most of the money being directed to the state’s ailing pension system, he would like to see it used for school security in the wake of widely publicized shootings.
While changing where the money flows is an issue that would be up to the legislature to revisit, it’s now the Kentucky Horse Racing Commission that is on the clock — and the timeline Beshear and Thayer are suggesting is aggressive, but not unprecedented. It would mean that the KHRC would have just over two months from the effective date of the new law to develop regulations, vet potential operators, and license facilities and operators.
Since the Professional and Amateur Sports Protection Act was overturned in May 2018, the fastest state from legal to live was Iowa, which took three months, and in that case, the law was effective immediately.
KHRC could get a head start
Kentucky’s new law does not become effective until late June, meaning that the KHRC can’t even officially begin work on the framework for legal sports betting until that time. In other states with an effective date other than the legal date, regulators began developing rules ahead of the effective date.
In Kansas, both the lottery and Kansas Horse Racing Commission were promulgating rules ahead of a July 1, 2022, effective date, and the first bets were taken at both retail and digital sportsbooks on Sept. 8, 2022, the first day of the NFL season.
In Massachusetts last summer, the regulator began meeting to discuss sports betting before that state’s governor signed a bill into law, and the first bets were taken at retail casinos six months later.
“House Bill 551 gives the Kentucky Horse Racing Commission (KHRC) six months from the effective date, on or about June 28, 2023, to complete the required regulatory framework,” the commission stated in an email to Sports Handle. “KHRC is dedicated to fulfilling its responsibilities in a timely manner while ensuring a successful implementation of sports wagering in Kentucky.”
Launch should happen before Super Bowl
Should the KHRC use the full six months to get to launch, the first bets would be taken in late January 2024, sometime prior to the Super Bowl on Feb. 11 in New Orleans.
Legal sports betting in Kentucky will be tied to the state’s nine horse race tracks. The state is not home to any professional sports teams, but it does have a NASCAR track and a PGA Tour stop. It also does host one of the biggest and most storied horse racing events in the U.S., the Kentucky Derby, and has two college basketball teams that are frequent participants in March Madness.
The new law ties sportsbooks to the tracks, each of which can have one retail sportsbook and three digital partners. With nine tracks, that means there could be as many as 27 mobile platforms in the state.
The new law lays the groundwork for an open, competitive market — it does not restrict wagering on colleges, sets the legal age at 18, does not require the use of official league data, and sets the tax rate at 14.25%. The fees will cost each track $500,000 for an initial license, with a $50,000 per year renewal, while operators will pay a $50,000 application fee and $10,000 per year renewal.