Will Kentucky Horse Racing Make Room For Casinos?

Posted on January 5, 2018

[toc]The calendar has barely flipped to 2018. Yet there is already an effort afoot to expand gambling in Kentucky. Legislation introduced on Jan. 2 would legalize casino gambling in the Bluegrass State.

A second bill introduced in the state Senate by Sen. Julian Carroll would authorize sports betting in Kentucky, on the condition that the current federal law prohibiting sports betting is changed.

A pre-filed version of the bills first surfaced before the holidays. At the time, local news station WCPO reported the sponsor of the legislation, State Rep. Dennis Keene, was looking at increasing the betting options at the state’s existing racing venues as well as authorizing up to four casinos in the state:

“Casinos and gambling have been the subject of controversial bills in recent legislative sessions, but Dennis Keene said he believes “the atmosphere is more receptive right now.”

Kentucky already allows parimutuel gambling — betting in which all winning bets share the total pool — at specific venues for horse racing. Keene’s bill would expand what those venues can do as well as add up to four casinos across the state. He sees the betting eventually including other sports, including basketball, baseball and football.”

What’s in the Kentucky casino bill?

The bill, HB 41, would remove the current prohibition on casino gambling in the state.

In so doing, Kentucky would authorize up to four new casinos. Racetracks would also be permitted to offer limited casino gambling too.

The state lottery would license up to four casinos at a cost of $50 million for a 10-year license. Thereafter, each licensee would pay an annual renewal fee of $6 million.

The bill also:

  • Imposes a hefty 31 percent tax rate on casinos games.
  • Requires a $3 admission charge per person per day.

Application process resembles Massachusetts

The process for applying for a casino license is very similar to the one successfully instituted in Massachusetts.

Potential casino operators would put forth a proposal and “bid” for the casino licenses, with the Lottery then evaluating each proposal and selecting the best of the bunch.

Prior to being evaluated by the Lottery, local municipalities would have to approve each casino proposal via a voter referendum.

What are the bills’ chances?

The horse racing industry is incredibly powerful in Kentucky, and the only gambling game in town at the moment. If racing isn’t on board the bill is probably dead in the water.

So it’s not surprising to see casino gambling and sports betting opened up to racing venues. But these concessions are likely not enough.

According to the Lexington Herald Leader, the bill has several highly placed opponents:

“State Senate President Robert Stivers, R-Manchester, said he does not favor allowing casinos in Kentucky and sees little chance the legislature will approve a casino measure in 2018.

And Republican Gov. Matt Bevin has said casino gambling is not going to happen in Kentucky.”

Want casinos? Just add water

For most of the 20th century, casino gambling was only legal in two places in the United States: Nevada and Atlantic City.

Since the early 1990’s, and spurred on by the 1988 Indian Gaming Regulatory Act (IGRA), casinos have multiplied faster than gremlins.

Thirty years after the passage of IGRA casino gambling is available in 40 states and counting.

The current list of 10 non-casino states comprises:

  • Arkansas
  • Georgia
  • Hawaii
  • Kentucky
  • New Hampshire
  • South Carolina
  • Tennessee
  • Utah
  • Virginia
  • Vermont

It’s almost a certainty that the number of holdouts will continue to shrink in the coming years.

In addition to Kentucky’s current efforts, New Hampshire, Virginia, and Georgia have seriously explored casino gambling as recently as last year.

Photo by  ehrlif / Shutterstock.com

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Steve Ruddock

Steve Ruddock is an avid poker player and a veteran member of the gaming media. His primary focus is on the regulated US online casino and poker markets. He writes for numerous online and print publications, including OnlinePokerReport.com, USPoker.com, and USA Today.

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