Kentucky may soon have a creative and sustainable way to fund problem gambling efforts in the state, depending on how its legislature reacts.
State Rep. Adam Koenig, who has committed to sponsoring bills that would legalize sports betting and eliminate breakage in parimutuel horse racing, also plans to submit legislation this session that would create problem gambling funding from an unlikely source: a recent $300 million settlement with Flutter, the parent company for PokerStars, 15 years after “Black Friday.”
“It’s a unique opportunity to make sure that money is there for generations,” Koenig said. “It’s a logical and good use for that money.”
Koenig said he got the idea from Michael Stone, the executive director of the Kentucky Council on Problem Gambling (KYCPG), who explained his vision for the plan, which he said came from a “contracted lobbyist.” Stone said the state would take $20-$30 million from the settlement, place it in an “irrevocable trust,” and fund problem gaming treatment and prevention programs from the interest that money generates. Stone said the interest would amount to $1-2 million per year, “which would adequately start to cover problem gaming programs and treatment in Kentucky.”
Koenig said his plan is to move the full total of the settlement, after any various legal fees or other costs are accounted for, into the trust, which would be managed by a board to make sure the “funds are distributed on a regular basis and done properly.” There would be a legislator or legislators on the board “to maintain oversight.”
That level of funding would be unheard of in Kentucky, which currently apportions no state funds to problem gambling efforts. Stone said the KYCPG has an annual budget of about $75,000, with funding from the gaming industry, sponsorships, and donations.
“We need to deal with it regardless [of whether a sports betting bill gets passed],” Koenig said. “With [billions of dollars] wagered in Kentucky, it’s embarrassing that we spend nothing.”
Funding not included in House budget
Koenig was hopeful problem gambling funding would be included in the state budget, but the budget passed through the House on Jan. 20 without it.
“It has to go through the Senate, so it could still get added, but I’m inclined to file a separate bill,” he said.
Keith Whyte, the executive director of the National Council on Problem Gambling, called the idea “interesting” but stressed that funding based on a percentage of gaming revenue should also be pursued.
“We’ve urged [Kentucky to fund problem gaming/responsible gaming] in general, so that’s very interesting,” Whyte said. “It’s also important that Kentucky dedicate money from their ongoing revenue and put it into their system, as well.”
Stone also stressed the need for more funding if Koenig’s sports betting bill were to become law, because of expected corresponding increases in addiction and treatment issues. But Koenig views the plan to use the Flutter settlement money as a replacement, with the trust structured to fund programs for “generations.”
Regardless, the idea to use the settlement money for problem gambling efforts is welcomed by advocates. But for those who have been seeking funds for many years, they are not getting ahead of themselves.
“I don’t know if I would use the term optimistic,” Stone said. “I would use the term hopeful.”