A Kentucky sports betting bill filed Wednesday more narrowly focuses the effort compared to previous years.
The bill from Rep. Michael Meredith legalizes retail and online sports betting for Kentucky horse racetracks. It makes no mention of online poker or daily fantasy sports, which were part of legislation passed by the House last year.
Wednesday was the deadline to file legislation in the Kentucky House. Previously, House Democrats had refiled last year’s legislation. Meredith’s bill is the only possible vehicle in a Republican-controlled legislature.
Meredith told PlayUSA that it’s time for Kentucky to legalize sports wagering. Seven of the eight states surrounding Kentucky have legal sports betting.
“There’s going to be a group of people who say we’re expanding gaming. I don’t see it that way. As a Kentucky resident, you can drive right across the state line and place a bet now. And because of the way our border regions are set up, there’s a huge amount of people who can be in another state placing wagers on their phones within about 15 minutes of their homes. I think it’s time to pick up that revenue that will be good for our pension systems.”
More limited bill stands better chance in Senate
Meredith takes over as sports betting’s champion in the House from Rep. Adam Koenig, who lost his reelection bid in November. Koenig now serves as executive director of the Kentucky Quarter Horse Racing Association.
Koenig was a big proponent of online poker and daily fantasy sports. But those issues aren’t as popular as sports betting in the Senate.
Senate Majority Leader Damon Thayer previously told PlayUSA that the Kentucky sports betting effort stood a better chance as a solitary issue.
“I just think the bill needs to be narrowly tailored toward legalizing sports betting. I think having fantasy sports and online poker in there were unnecessary distractions.”
Details of the Kentucky sports betting bill
Meredith’s legislation takes most of its language from Koenig’s bill that passed the House.
Other than eliminating the online poker and daily fantasy sports provisions, the biggest changes are adding licensing for sports wagering platforms and requiring in-person registration for the first 12 months after the effective date of the Act.
The bill has not yet hit the Kentucky legislative site but PlayUSA received a copy from the author. Key details of HB551 include:
- Authorizes retail and online sports wagering for licensed Kentucky horse racetracks.
- Nine racetracks could partner with up to three mobile sports wagering providers for a maximum of 27 Kentucky sports betting apps.
- Regulated by the Kentucky Horse Racing Commission.
- The KHRC must promulgate regulations to establish a fully functional sports wagering system within six months of the Act’s effective date.
- Allows wagering on professional sports, college sports, amateur sporting events (not including events with individuals under 18 years of age), international sporting events including the Olympics and World Cup Soccer, and esports.
- Minimum age requirement of 18 to wager on sports.
- Sports wagering licenses cost $500,000 the first year and $50,000 annually thereafter.
- Service provider licenses cost $50,000 the first year and $10,000 annually thereafter.
- Licensees may receive a temporary license to immediately commence sports wagering operations.
- Tiered tax rate of 14.25% for online wagers and 9.75% for sports wagers placed at racetracks.
- Adjusted gross revenue excludes federal excise taxes but not promotional credits.
- Any person tampering with the outcome of a sporting event is a Class C felony.
Racetracks eligible for Kentucky sports betting licenses
Sports wagering licenses are tied to racetrack licenses issued by the Kentucky Horse Racing Commission. The Commission has issued nine licenses, but Churchill Downs owns two of them.
Meredith said he wasn’t sure if Churchill Downs could then offer six skins under the bill. But he didn’t expect Churchill Downs to seek to use more skins anyway.
Churchill Downs bought the old Louisville Downs license to open the Derby City historical horse racing facility.
Kentucky horseracing licenses potentially eligible for sports wagering are:
- Churchill Downs
- Ellis Park
- Keeneland Association
- Turfway Park
- Kentucky Downs
- The Red Mile
- Oak Grove
- Revolutionary Racing (not yet open)
- Louisville Downs (owned by Churchill Downs)
Prospects for Kentucky sports betting effort
Getting bills passed in odd years is always more difficult in Kentucky. Any legislation passed this year must do so by a two-thirds vote.
But Meredith says Kentucky sports betting is close.
“I think we have enough votes in the House to pass, probably with a few to spare. Based on the high-level discussions I’ve had, I think we’re within one or two votes of getting the Senate numbers to pass even with the higher threshold. I don’t want to take anything for granted, but I’m pretty optimistic we can get this passed.”
Meredith said he hopes to get the bill a hearing in the House Licensing and Occupations Committee next Wednesday.
Gov. Andy Beshear once again mentioned sports betting at his State of the Commonwealth address in January. Beshear wants lawmakers to put sports wagering legislation on his desk.
Kentucky lawmakers only have about five weeks to move on a bill. Kentucky’s legislative session ends March 30.
