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Kentucky Gov. Andy Beshear took his veto pen to House Bill 904, legislation that will ban in-state college prop bets and rein in prediction markets. Last week, the state legislature overrode that veto, meaning the law will take effect in 90 days.
Veto centered on ‘poison pill’ provisions
While HB 904 will impose sweeping changes to the state’s sports betting landscape, Beshear stated his veto was less about the proposed wagering changes and more about provisions that would permit executive branch agencies to file regulations without his approval.
With HB 904 taking effect, the Kentucky Lottery Corp. and Kentucky Horse Racing and Gaming Corp. will have the authority to file emergency and ordinary regulations without the governor’s review or approval.
“Under the Kentucky Constitution, the governor is the chief magistrate of the executive branch and has a duty to ensure all laws are faithfully executed, including by agencies carrying out the law through regulation,” Beshear said in a Legal Sports Report news statement.
“Authorizing an agency to file an emergency regulation in this manner would prevent the governor from carrying out his constitutional duties.”
Majority vote seals Kentucky veto override
The override was widely expected due to Kentucky’s legislative rules, which require only a simple majority to overturn a gubernatorial veto. The Senate voted 24-13 to override, followed by a 64-19 vote in the House.
Changes coming to Kentucky sports betting
Kentucky HB 904, sponsored by Rep. Michael Meredith, significantly alters the wagering landscape in the Bluegrass State. Key changes include:
- Age Limit: Raising the legal betting age from 18 to 21.
- Prop Bets: Prohibiting proposition bets on in-state collegiate athletes.
- Horse Racing: Authorizing fixed-odds wagers on horse races.
- Fantasy Sports: Implementing a 12.5% tax on transactions and requiring contests to include at least two participants, effectively banning “against the house” style pick’em games.
The prediction market compromise
The original text of the bill could have triggered an exodus of major sportsbook operators like DraftKings and FanDuel. Initial language banned sportsbooks from holding a Kentucky license if they operated a prediction market anywhere in the U.S.
Operators submitted a letter in opposition, warning the state of a potential $40 million annual loss in tax revenue. Lawmakers ultimately reached a compromise: the final bill only prohibits operators from running prediction markets within the state of Kentucky.
