Kentucky Sports Betting Bill Crosses First Hurdle
Sports betting in Kentucky could be coming in 2020 if certain lawmakers have their way. The first step to passing legislation took place this week.
With March Madness and the Kentucky Derby coming into view, sports betting enthusiasts in Kentucky received some good news today when the proposed bill that would legalize the activity in the Bluegrass state was passed unanimously through committee.
House Bill 137, that would see sports betting become legal at racetracks and the Kentucky Speedway, was voted on and passed by a House Committee on Jan 14th. The next step in the potential passing of this legislation is the bill being sent to the House Of Representatives for debate.
In discussing the proposed legalizing of sports betting in Kentucky, Rep. Al Gentry, the co-sponsor of the bills, said, “This bill is not going to solve our challenges, we know that,” He continued. “But it is a good first step. Sports betting is already here, fellas and gals. We just want to regulate it and obtain the revenues that are currently leaving the state.”
Governor Andy Beshear referenced sports betting specifically in his State of the Commonwealth speech. “Right now, we’re watching more than $500 million in gaming revenue go across the border,” he said in reference to money being gambled in nearby states and with the offshore sportsbooks hosted in Latin America.
This version of the bill is very similar to one that was introduced in the 2019 legislative session, with one major change. This bill has updated language that would allow sports betting operations to take bets on in-state college athletics. This was a hotly-contested issue given the amateur status of college athletes and the potential for scandal. However, given the popularity of local schools like the University of Kentucky and University of Louisville, any regulated sportsbook not able to offer bets on those teams would bring out themselves at a terrible disadvantage.
Another crucial component of Bill 137 is that online licenses will be issued. With only a handful of retail locations, allowing Kentucky residents to bet from their phones and computers will increase the overall numbers by a massive amount. Mobile gambling is the future of the industry, and states like New Jersey are reporting north of 80% of all bets being made by an online device. It is excellent to see that Kentucky lawmakers see the benefit of mobile betting early on, as some states have dragged their heels on the issue.
Experts estimate that Kentucky can expect to see approximately $22.5 million in additional taxes from sports betting in the state. Of course, these figures are based on other states and cannot take into consideration the proliferation of offshore betting by region in the U.S. Regardless of the fact that it is not a huge number, the state is trying to come up with ways to lower its budget deficit, and adding a new taxable behavior is one way to do it.
Several groups are against the concept of legal sports betting in the state, with the most vocal being The Family Foundation of Kentucky. They claim that this is a direct violation of the constitution and that this type of behavior will cause more problems than the benefit of the additional tax dollars. Kentucky is a conservative state, but lawmakers from both sides of the aisle have come together on the issue of sports betting.
The horse racing industry is waiting excitedly for the bill to become law. Kentucky is the center of the horse racing industry, but with dwindling number for the last couple of decades causing fewer races to be held at local tracks, the operators are looking for new ways to add revenue to their shrinking bottom lines. A boost from the sports betting industry is exactly what the horse racing industry needs and stakeholders are vocal in their support of the bill.
There is no timeline for the next stage of the process, but it will involve a series of discussions and debates on the topic, likely involving industry experts from outside the state. The legislative session ends in the late spring, and it is expected that the House will vote on Bill 137 well in advance of that date. Should the legislation pass, it is likely too late for residents to take advantage of legal sports betting for this year’s Derby, but by the football and basketball seasons, we would most likely see legal sports bets being taken in the state.