When the Kentucky Horse Racing Commission approved emergency regulations for the upcoming sports betting launch, it cemented a launch date.
Brick-and-mortar sportsbooks can start accepting wagers on Sept. 7. Online betting comes a few weeks later, launching on Sept. 28.
As a result, the Kentucky sports betting industry became one of the quickest to go from legalization to online launch in US history. Normally, such a quick turnaround could be a warning sign for problems to come.
However, a prominent gaming lawyer doesn’t think that’s the case.
Nick Jackson is senior counsel at the ZwillGen law firm in Washington, DC, and the managing director for ZG Gaming Solutions. The latter is ZwillGen’s affiliate company that provides gaming licensing management services.
Kentucky Already Knows What Works and What Doesn’t
It has been more than five years since the US Supreme Court overturned PASPA, making sports betting a state issue. In Jackson’s mind, the industry has matured and we’ve seen what works and what doesn’t
In other words, Kentucky isn’t reinventing the wheel.
Kentucky regulators watched other states and know the blueprint to success.
“They’re entering this process with a lot of experience to draw on,” Jackson told PlayKentucky. “Both the industry and the regulatory community have been through launching in a new state many different times.”
At a KHRC meeting in June, Chairman Jonathan Rabinowitz said officials were meeting with regulators from other states. The goal was to discuss best practices and determine how to regulate the new industry.
KHRC members met with state regulators from Massachusetts, Indiana, New Jersey, Ohio, and Colorado. All of which have had varying degrees of success with their sports betting.
It furthers Jackson’s point that, despite sports betting being an endeavor for Kentucky, it isn’t flying blind.
“There’s a lot of knowledge at this point out there,” Jackson said. “That wasn’t the case three or four years ago.”
Adding Staff Members Shows Kentucky Wants to Do It Right
It’s one thing to have a plan. It’s another to implement it.
Kentucky isn’t taking this task lightly. In June, the KHRC announced it was adding 14 new positions to help with sports betting.
“They seem to be taking it very seriously in terms of staffing up,” Jackson told Gaming Today.
Historically, the KHRC only dealt with horse racing. Recently, when historical horse racing machines were introduced, the commission oversaw those too. However, adding a third activity to oversee requires more manpower.
The fact that Kentucky is adding it shows the commission wants to regulate it correctly.
Operators Have More Knowledge Too
Kentucky’s quick turnaround and ambitious launch timeline are some of the bigger storylines surrounding Kentucky sports betting. Jackson’s take about governments and regulators having more knowledge holds true for sportsbooks as well.
As part of the Kentucky emergency sports betting regulations, online sportsbooks can obtain a license if they are licensed in at least three other US jurisdictions.
Kentucky would be the 20th state for both of those sportsbooks. It’s safe to say these companies know what to expect. And Jackson believes that the participation of experienced operators will only help with a smooth launch.
“The commission will likely be working, predominantly, with operators that have been through up to two dozen launches,” Jackson said. “I think it is probably easier to accomplish a compressed launch timeframe now than it was a number of years ago when a lot fewer things were figured out.”
Emergency Regulations Give Kentucky Leeway for Change in the Future
Another gaming attorney, Jeff Ifrah, predicted that Kentucky would use emergency regulations to launch in time for the NFL season.
Kentucky’s launch timeline was the most aggressive of any state. But other states took the same regulatory approach when the turnaround was supposed to be quick.
Jackson said he saw a “number of states” use emergency regulations when the timeline was within a year.
These launches weren’t as quick as Kentucky’s. But they were still quicker than what most states could achieve.
Additionally, you’re seeing regulators go back and change rules as they move forward.
For example, Tennessee started taxing handle instead of revenue. And Ohio implemented a rule that bans bettors from using the state’s sportsbooks if they threaten an athlete.
“This is a young and evolving industry,” Jackson told PlayKentucky. “And regulators adapt over time and standards adapt over time. This seems like a very sensible approach to me. There are a lot of hurdles to clear procedurally before launch. It makes sense for the parts of the process requiring a lot of work from commission staff and operators to get started as soon as possible, and then work can continue in parallel to refine and shape the regulations that are going to govern in the long term.”
In other words: There are only a dozen states that haven’t legalized sports betting yet. If Kentucky’s launch goes smoothly, it could alter how long regulators take to launch a market in the future.