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Kentucky sports betting is looking for a second win in the state House of Representatives, which approved a sports betting measure in 2022. One proposal this year has a good shot at House passage after committee approval Wednesday.
But getting enough votes to make it to the Senate in 2023 will be extra tough.
The big challenge is the number of votes needed to pass a bill raising revenue in odd-numbered session years. Like most bills legalizing sports betting, proposals in Kentucky – including HB 551, the bill that passed out of committee Wednesday – would raise revenue through license fees and taxes. In even-numbered year regular sessions, a revenue bill takes only a simple majority to pass. In odd-numbered years like this one, it takes three-fifths approval of each chamber.
That’s 60 votes in the House – or two more than the 58 that allowed a sports betting bill to easily pass the House in 2022.
No Kentucky sports betting bill made it to the Senate floor in 2022. It will take 23 votes to pass HB 551 in the Senate this year.
Another issue is time. The last scheduled day of the current session is March 30, or 19 legislative (working) days from now. Kentucky lawmakers don’t meet in session on Sundays.
But there are reasons for optimism in 2023.
What’s In HB 551?
Here are details of the sports betting legislation making its way through the Kentucky statehouse:
Number of Licensed Sportsbooks
- Up to 27 online apps, or three per the nine licensed horse racing tracks in the commonwealth (sports betting only, no online poker or DFS)
- OTBs could contract with tracks to offer retail sports betting
- No in-person registration requirement for customers
Sporting and Athletic Events Covered by HB 551
- Wagering allowed on professional sports, college sports, international sports including the Olympics and World Cup soccer, eSports and competitive video game events, or any other event authorized by the state racing commission
Kentucky Sports Betting Tax Rate
- 9.75 percent tax on operator revenue from retail wagers
- 14.25 percent tax on revenue from online and mobile bets
Fees
- License fee per track: $500,000 initial, $50,000 renewal
- License fee per sports betting operator: $50,000 initial, $10,000 renewal
Legal Betting Age
- 18
Reason for Optimism for Kentucky Sports Betting
It is noteworthy that HB 551 passed the House Licensing and Occupations Committee Wednesday on a unanimous and bi-partisan vote. That’s not an easy feat for bills in the deep-red Kentucky General Assembly.
One unifying factor is the bill would earmark all revenue, aside from regulatory costs, to pay down billions in public pension costs that have haunted the Kentucky state government for more than a decade.
HB 551 lead sponsor Rep. Michael Meredith, R-Brownsville, said in his committee testimony Wednesday that he expects HB 551 to raise around $23 million annually for the commonwealth’s permanent pension fund. Not a lot of money, Meredith said, but more than the Bluegrass State gets from illegal and unregulated sports betting happening across the commonwealth.
Kentuckians Betting Nearly $1 Billion on Sports Per Year
Kentuckians now bet nearly $1 billion annually on sports through illegal or unregulated websites and bookies by some estimates, said Meredith. At the same time, six of the seven states surrounding Kentucky now have legal sports betting.
One of those states is Ohio, which launched sports betting on Jan. 1. Data from Geocomply shows up to one million attempts to access Ohio sportsbooks in the month after launch came from Kentucky, Meredith said.
Most of those attempts reportedly happened in counties along the Kentucky-Ohio border.
Opposition to Legal Sports Betting in Kentucky Remains
Not everyone who listened to Meredith testify on HB 551 Wednesday agrees with the bill. David Walls with the Family Foundation – a conservative public policy group – is one of the opponents.
“The Family Foundation’s opposition to the expansion of predatory gambling is well known to this committee and its members,” Walls told the House Licensing and Occupations Committee.
Walls called legal sports betting a “form of financial fraud” promoted by the government and gambling operators.
“The social costs are only amplified when we talk about online sports and video game betting made on already highly addictive phones and tablets,” he said.
Refusing to enter the fray, Meredith called HB 551 a consumer protection bill designed to help, not hurt, Kentuckians.
“I can’t debate anyone’s moral objections or religious convictions to this bill,” said Meredith. “I’m here to tell you about taking an industry that exists in the shadows and legitimizing it, legalizing it, and regulating it to protect the consumer in Kentucky.”
