Legal Expert Compares Kentucky’s Sports Betting Launch To New Jersey

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The future of Kentucky’s sports betting industry just became much clearer, and one industry expert is “excited” about the upcoming launch.

Gilbert Brooks, an attorney specializing in gaming law with national firm Duane Morris, spoke with PlayKentucky to give his opinion on some of the state’s new sports betting regulations.

“It’s exciting that Kentucky is coming on board. I’ve dealt with them a lot in the ADW (advance deposit wagering) space over the years and found the jurisdiction to be great,” he told PlayKentucky. “I think it’s going to be another successful launch.”

Kentucky sports betting will launch on Sept. 7, in time for the first NFL game of the season. However, only brick-and-mortar sportsbooks will be available. Online sports betting launches a few weeks later on Sept. 28.

According to its website, Duane Morris is a law firm with more than 900 attorneys worldwide involved in various aspects of the law, including online gaming. In Brooks’ time with the company, he’s observed many states launch their sports betting industries for the first time, so he’s not a stranger to what’s happening in Kentucky.

He shared some of his takeaways from his experience and advice with PlayKentucky.

Brooks’ Experience With New Jersey’s Quick Launch, Similar to Kentucky

Brooks told PlayKentucky that while it wasn’t identical, New Jersey went through a similar quick launch like Kentucky when it legalized online casinos in 2013. The legislature signed off on an 11-month turnaround from legality to launch.

Brooks noted that one of the big issues was technical testing.

“You have to create the platform to be able to offer (gambling),” he said, “and the platform has to be able to perform and handle the kind of action that you get with big games and with in-play. In-play is a huge factor, and there’s a lot of engineering that goes into that.”

He noted that when New Jersey legalized sports betting in 2018, it was a bit smoother of a transition, as the state already had been through the online casinos launch.

Looking at Kentucky, Brooks explained that engineering the revenue reporting methods will be key.

“The biggest thing, too, is you have to engineer the reporting requirements, particularly with revenue,” he said. “The state has a very vested interest in making sure the Commonwealth of Kentucky revenue is tracked so they get their tax. There’s a lot that goes into it from the platform development side.”

Kentucky Has an ‘Advantage’ With Adw

In 2011, the Kentucky senate passed a bill that authorized advance deposit wagering licensing. ADW simply means a bettor must fund their account first before being able to place bets. ADWs have been a mainstay ever since in the Kentucky horse betting industry, with TwinSpires being one of the most notable ones.

ADWs aren’t necessarily connected to traditional sports betting. But Brooks thinks there’s some untapped potential in the market.

“Kentucky itself has an advantage in the sense that it has a deep history of ADW,” he said.

Brooks believes ADW and sports betting go “hand-in-hand.”

Kentucky Will Likely See Sportsbook Consolidation

It’s happening across the country as smaller or newer operators realize they cannot compete with the likes of DraftKings, FanDuel, BetMGM Sportsbook, and Caesars Sportsbook.

Brooks’ team was involved in Arizona’s sports betting launch in 2021, and he said this was a topic that came up.

“You had so many operators come into that space,” he said. “Now, you’ve already seen one or two start to drop out. Its very tough to compete, but that customer acquisition element is a big part.”

Sportsbooks view an industry launch’s first year or two as a chance to secure a customer for life. Sports bettors are picky when it comes to choosing their favorites. When a state legalizes the industry, bettors will set up accounts with several operators to test the waters.

Over time in Kentucky, they’ll lean toward one or two operators. That can be due to certain Kentucky sportsbook promotions, ease of use or other reasons.

We’ve seen up-and-coming sportsbooks try (or at least come close) to match some of the big industry names in newer states.

Look at Ohio, which launched its sports betting market in January. Tipico, a European sportsbook available in just four states, spent $1.9 million on promotional credits during Ohio’s first month of operation. It was the fifth-highest spend of any sportsbook operator in Ohio during that time frame.

But we’ve also seen several operators shutter their business across the country. PointsBet announced in April that it was stopping its US operations. Fubo Sportsbok and MaximBet both ceased their operations midway through last year. While they didn’t shutter their US operations, Betfred is unlikely to enter the Kentucky market.

“DraftKings and FanDuel have been very aggressive with the incentives and bet forgiveness, trying to capture a player, and they have great technology,” Brooks said. “BetMGM, Caesars have significant land-based presences and have an ability to market where you can’t really compete with it. You’ve got Jamie Fox, J.B Smoove, and the Manning brothers — you watch those commercials and you want to make a wager. They have great marketing.”

About the Author
Carson Mundy

Carson Mundy

Brand Content Manager
Carson Mundy is the brand content manager of Gaming Today. With a background in politics and sports, he covers the legislative side of the sports betting industry. Carson has more than a decade of experience in the Canadian media and marketing industries, with time spent at resulta, The Canadian Press, Microsoft News, and other national outlets.

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