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FRANKFORT — Sports betting legislation received unanimous approval today from a Kentucky House committee, a possible sign that Kentucky sports betting will be legalized here in 2022.
It was the third time in four years a sportsbook bill backed by House Licensing, Occupations, and Administrative Regulations Committee Chair Adam Koenig has made it out of that committee and to the House floor. None of the past bills had overwhelming House support, however, and none made it to the Senate.
Today’s vote could mean Kentucky legislators have had a change of heart where expanded gaming is concerned.
“I think we’re in a better position to have better luck,” Koenig, R-Erlanger, said of the proposal, which would also legalize fantasy sports and online poker.
Koenig’s latest proposal (House Bill 606) would authorize in-person and online sports betting tethered Kentucky horse race tracks only. Each track would be eligible to contract with one sports betting operator such as FanDuel, DraftKings, or Caesars for both retail and online sports betting, regulated by the Kentucky Horse Racing Commission (KHRC).
Bets could be placed on professional, international, and college sports under the bill, with no exclusion for in-state colleges.
That means betting on sports teams from the University of Kentucky, Louisville, and other in-state schools would be allowed under HB 606, which would also allow in-play betting.
But how far sports betting goes in Kentucky would ultimately be up to state regulators. KHRC would have final discretion on what types of bets are allowed, and on which sports events.
Kentucky Is Running Behind In Race For Expanded Gaming
The unanimous vote for HB 606 by the House committee suggests 2022 could be the year Kentucky finally approves sports betting – already legal in almost 30 states and Washington DC.
Koenig said Kentucky is losing at least $20 million in tax revenue annually to illegal sports betting, which he estimated averages $2 billion in total wagers per year. HB 606 would tax in-person sports bets at 9.75 percent on adjusted gross receipts and 14.25 percent on online or mobile bets.
Horse tracks would have to pay an initial licensing fee of $500,000 to operate sports betting, renewable annually for $50,000.
Koenig told the committee he sees legalization as a way to secure sports betting revenue now going to neighboring states and illegal markets, while simultaneously helping Kentucky’s signature horse industry.
“I ran for office to make Kentucky more business friendly,” he said.
All proceeds from sports betting, fantasy sports, and online poker would go to the state’s beleaguered public pension fund, minus state regulatory expenses.
Koenig Hopes For A Trifecta
HB 606 is one of three bills sponsored by Koenig this session that would expand gambling regulation in the commonwealth.
Koenig has also proposed HB 607, which would implement a flat tax of 1.5 percent on all pari-mutuel wagering in Kentucky.
The other proposal, in HB 609, would establish a perpetual problem gambling assistance fund largely funded by a $300 million settlement with the website PokerStars.
The settlement, reached in 2021, stemmed from a 2011 lawsuit with the gambling website.
When Could Kentucky Sports Betting Launch Under HB 606?
The sports betting proposal in HB 606, plus both HB 607 and HB 608 – a bill sponsored by Lexington Rep. Killian Timoney to eradicate illegal slots statewide – would take effect this year should they make it through this session.
That could put sportsbooks live by mid-summer.
An “emergency clause” on HB 609 would allow it to take effect the moment it is signed into law by Gov. Andy Beshear. But like the other bills, the proposal has to make it through the legislature first.
Sports betting legislation is also pending in the Kentucky Senate, although it has yet to be heard in committee. The Kentucky Senate has historically been less receptive to expanded gambling than the state House.
All bills have one more month to make it past both the House and Senate and to the governor’s desk before the 2022 Kentucky General Assembly comes to a close.
The last day of the current regular session is April 14.
