The Kentucky Horse Racing Commission committed to an incredibly lofty goal by passing emergency regulations last week.
It will launch the Kentucky sports betting industry by the start of this year’s NFL season. In other words, it is looking at one of the quickest turnarounds from legalization to launch in US history.
Assuming no problems, the Bluegrass State will complete that process in just over five months. In such a short period, plenty could go wrong. However, a prominent gaming attorney in Kentucky believes the KHRC is up to the task.
Laura Holoubek is a partner at the Dinsmore Law Firm in Lexington. She is an expert in equine and gaming law, and has worked with several of the country’s largest gaming companies. Holoubek helped those clients navigate the regulatory framework at both state and federal levels.
KHRC’s Experience Points to Successful Sports Betting Rollout
At the end of March, Gov. Andy Beshear signed the bill legalizing online and retail sports betting in the Commonwealth. The legislation named the KHRC as the regulatory body overseeing the new sports betting industry.
Kentucky isn’t one of the most gambling-friendly states in the country. Sports betting is the first major gambling expansion since the lottery was introduced in 1989.
On the other hand, horse racing has been in Kentucky since 1828 and the KHRC was created in 1906. That is more than a century’s worth of successful gaming regulation.
“They have many very experienced commissioners from an industry point of view in horse racing,” Holoubek told PlayKentucky. “(It’s) not sports betting, but I’ll say that I’ve been very impressed by how quickly they managed to get the regulations together.”
HB 551 took effect at the end of June. The legislation stated that once the law was enacted, the state must launch the industry within six months of that date.
It gave Kentuckians a worst-case scenario of a sports betting market by the end of 2023. But Beshear quickly came out and publicly stated his desire to see it operational by the start of the NFL season.
Gaming regulators quickly got on board and used emergency regulations to ensure it happened. This dedication to a quick rollout is another reason Holoubek is optimistic about a smooth launch.
Regulators announced last week that retail sportsbooks could accept wagers starting on Sept. 7. Online sportsbooks like BetMGM Kentucky, Bet365 Kentucky, and Caesars Kentucky, can begin operations on Sept. 28.
“There’s definitely a very strong commitment to getting this up and going,” Holoubek said. “And obviously, the NFL season is their objective, with the launch date of Sept. 7. So, I would say that it looks like they’ll be in good shape to launch.”
Temporary Licenses Should Help Expedite Process
As part of the emergency regulations, the staff will be awarding temporary licenses to venues and their online betting partners. To be eligible for a license, the online operator must already be licensed in three other US jurisdictions.
This stipulation will speed up the licensing process, furthering the likelihood of an on-time launch.
“I think their plan is to fast-track temporary licenses for those entities,” Holoubek told PlayKentucky. “That will help them get up and running quicker, and then they’ll go through permanent licensing over the course of the following year.”
Getting a permanent license won’t be easy for hopeful licensees. Holoubek noted how strict the KHRC is with its process.
“With account wagering providers here in Kentucky, they really do take a very deep dive on the application,” Holoubek said. “And any kind of change of ownership has to be disclosed and they look into that. They’re used to doing that online wagering application on the horse racing side, so I would expect they would use the same approach here.”
Horse Racing Prepared Commission for 18+ Age Requirements
One of the more controversial parts of the legislation was that it allowed those 18 and up to bet on sports. Most other states require sports bettors to be 21.
But that doesn’t appear to be controversial to lawmakers. Legislators vetoed amendments that would raise the betting age to 21 and ban credit card use as a form of wagering.
Furthermore, you only need to be 18 to bet on horse races. As a result, the KHRC is already familiar with responsible gaming regulations aimed at protecting a younger demographic.
The emergency regulations prohibit advertising targeted at the K-12 audience, which has already been implemented in the horse racing world.
“There is lots of advertising in Kentucky about the racetracks and about historical horse racing locations,” Holoubek said. “It doesn’t talk specifically about gambling. It talks more about the location or the experience.”
According to a Gaming Today survey, 71% of Kentucky residents prefer a 21+ age requirement for sports betting. Most responsible gaming experts who push for the higher age requirement do so out of fear of increased gambling addiction rates.
But that doesn’t appear to be the case with Kentucky horse racing, at least anecdotally.
“I haven’t heard of any real gambling addiction issues,” Holoubek said. “I certainly don’t hear it in the general population, or as I’m attending conferences or speaking to clients. But the legislature has committed funds for resources to assist anyone with gambling addiction.”
About the Author
