On Monday, the Kentucky Horse Racing Commission approved sports betting regulations to govern the launch of the industry later this year in September.
On Tuesday, the commission released those regulations for public review.
There were hundreds of pages of Kentucky sports betting regulations, from licensing requirements to sportsbook security protocols. The casual sports bettor doesn’t need to know most of these rules. But Gaming Today dug through all of them, and here’s what you need to know.
Emergency Regulations Are Same as the Ordinary Ones
As gaming attorney Jeff Ifrah predicted, the KHRC passed emergency regulations so Kentucky sportsbooks could launch before the NFL season started.
The Kentucky sports betting legislation mandated a launch before the end of the year. But Beshear wanted to see sports betting on NFL games this year. The only way to get that done was through emergency regulations.
Emergency regulations are enacted immediately. The ordinary regulations will go through a standard vetting process, including a public review period.
Once the ordinary regulations are passed, they will supersede the emergency ones. But the regulators didn’t say at the meeting that the regulations are the same. The last line of the regulations’ statement of emergency reads as follows:
“The ordinary administrative regulation is identical to this emergency administrative regulation.”
In other words, these emergency regulations will be the ordinary regulations unless the KHRC makes amendments after the public comment period. The KHRC scheduled a public hearing for feedback on Aug. 22, ahead of the Sept. 7 launch.
These emergency regulations will expire on April 5, 2024, or when the ordinary regulations are passed. Whichever occurs first.
Licenses and Fees
Three Kentucky sports betting licenses exist: operator, service provider, and occupational.
There are 14 eligible venues for a brick-and-mortar sportsbook. The nine horse racing associations behind those facilities must apply for an operator license to open one. Those cost $500,000 and are renewed annually for an additional $50,000. Two or more associations can combine for a joint application if they so choose.
Those operators can partner with up to three online sports betting companies. Those partners need to obtain a service provider license. Those cost $50,000 and an annual renewal fee of $10,000.
Lastly, anyone working for either one of the aforementioned licensees must obtain an occupational license. Occupational licenses are split into three categories:
- Racebook and sportsbook employee
- Key employee
- Information services provider
The race and sportsbook employee license costs $150. Workers interacting with customers on the sportsbook floor, like a cashier, will need this license.
The key employee license costs $1,500 and is for managerial positions.
Lastly, the information service provider licenses are for employees working behind the scenes. For example, oddsmakers will need this license, as will anyone working with platform providers like a geolocation service.
Very Few Betting Restrictions
There are no significant restrictions on which sports Kentuckians can bet on. Professional and collegiate athletics are both allowed. In-state college betting is OK as well.
Esports betting is allowed, but the commission must approve the event beforehand.
Here are the only restrictions:
- No betting on penalties or injuries
- No betting on the outcomes of replay reviews
- Betting on the outcome of a disciplinary proceeding is prohibited
- No betting on youth sports – matches that include athletes under the age of 18
- No events with a pre-determined outcome
The last restriction seems like a no-brainer. But earlier this year, WWE was in talks with regulators in some states to have its scripted professional wrestling matches available to wager on.
That won’t happen in Kentucky.
Betting Methods Are Abundant in the Bluegrass State
Kentucky also offers very few restrictions for payment methods for sports betting. There’s almost nothing that Kentucky sportsbooks won’t accept for a wager.
Here are the approved methods:
- Cash
- Credit and debit cards
- Electronic funds transfers (this is mostly used for online betting)
- Promotional or bonus credit
- Winning sports wagering tickets or vouchers
- Funds within a sports wagering account
The credit card option stands out here. In several states, this is not an option for betting. Technically, the bettor borrows money to wager, which is not a responsible way to gamble.
But we felt this was coming after lawmakers voted against an amendment that would bar credit card use.
No Large Payouts From Kiosks
If you’re a high-roller or happen to drill a longshot parlay, you will need to get paid by an employee.
Self-serve kiosks have become much more popular in sportsbooks in recent years. But if a gambler wins a bet that pays out $10,000 or more, that person must be paid out by a sportsbook employee.
The winner must also provide certain information and ID to receive the cash.
Strict Rules Around Language in Promos and Advertising
Regarding Kentucky sportsbook bonuses and marketing material, Kentucky regulators require straightforward language from its licensees.
Promos shall be “full, accurate, concise, transparent and shall not contain misleading information.” Additionally, the KHRC will not allow term “free” or “risk-free” if the patron could incur a gambling loss from participating.
Operators are also forced to keep detailed records of all their promo activity.
Similar rules are in place around language for advertising. Moreover, sportsbooks are not allowed to advertise to children. This includes using mass media specifically targeted at the K-12 age groups.
Still No Word on Promo Tax Write-Offs
One of the key regulations left out of the bonus section was whether sportsbooks could write off their promotional spending.
The public comment period will have feedback from residents and operators. My guess is this issue will be taken up next month.
Kentucky Used Fairly Run-Of-The-Mill Responsible Gaming Controls
Nothing stood out in the responsible gaming section of the regulations. Most of the rules are also used in other states.
Account holders can set a deposit limit on a daily, weekly, or monthly basis. And the same goes for wager limits. But they can change these controls when they want to, and are effective immediately.
The commission also mandated that every operator develop an approved self-exclusion list for self-identified problem gamblers. The list shall include names and other info about the individuals who chose to self-exclude.
Operators must also display a notice about the existence of this list and option. Brick-and-mortar sportsbooks must place this notice at all their entrances. The notice should also include the consequences of self-exclusion.
Account holders are allowed to enact a temporary break of at least 72 hours. But if they choose this option, the operators must send them information about problem gambling and self-exclusion availability.
Lastly, operators must develop and maintain a responsible gaming program. Information about this program must be displayed prominently and include a toll-free number for problem gambling assistance.
This program must be reviewed every five years by an independent third party.
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