Updated Bill for Sports Wagering Sent Back to the Legislative Starting Gate in Kentucky

• New legislative efforts from Rep. Adam Koenig of Kentucky being introduced for 2021
• KY Gov. Brashear frustrated losing sports betting opportunity to surrounding states
• Roadblocks to the new bill’s passage remain but gaining political support brightens potential 

Perhaps learning from other states’ recent history and their own challenging legislative path, Kentucky has revamped legislative efforts to pursue sports wagering for the state in 2021.

Led again by Rep. Adam Koenig (R-Erlanger), he introduced a bill on Jan. 9 that would permit sports wagering at racetracks and the Kentucky Speedway, with regulatory oversight falling under jurisdiction by the Kentucky Horse Racing Commission. Under this new legislation, online sports betting and online poker would also be allowed.

Driving this new effort for Rep. Koenig is a surety that sports betting in Kentucky will be up for debate as his new sports betting bill is set to be presented at the upcoming 2021 legislative session. Similar legislation was discussed last year at the committee level and was approved but was not entertained on the House floor. This year’s updated bill is awaiting assignment to a legislative committee for consideration.

Current Sports Wagering Conditions in Kentucky

Geographically, Kentucky is surrounded by other states that have recently adopted sports wagering legalization in the past two years including Indiana, Illinois, Tennessee, and West Virginia. However, the Kentucky legislature has been stoic and less enthusiastic to expand sports betting or any new gambling efforts in the state.

Governor Andy Beshear has consistently endorsed bringing sports wagering to the state and issued this statement:

I believe the time was right years and years and years ago when virtually every site around us, all Republican states, already have it. The fact that we have not done it at this point is not only silly but puts us at a competitive disadvantage.

In his State of the Commonwealth and Budget address on January 7, Beshear called on state lawmakers to back legislation that would protect historical horse racing, which has been critical for racing and breeding in Kentucky by bolstering purses and to approve sports wagering. He commented from the Governor’s Mansion in Frankfort:

Speaking of laws that unduly restrict us from growth and innovation. It is time to legalize medical marijuana, pass sports betting, and save historic horse racing.

The New Bill

The updated bill being presented, House Bill 241 is similar in nature to last year’s legislation allowing for sports wagering, however adding online poker and daily fantasy sports.

Under guidelines, the Kentucky Horse Racing Commission would regulate sports wagering, while the Kentucky Public Protection Cabinet would oversee daily fantasy sports and the Kentucky Lottery would be responsible for online poker.

As included in last year’s bill, the state’s horse and harness racing tracks would be eligible to obtain sports wagering licenses along with any professional sports venue in Kentucky that seats at least 50,000 or more people. At present, only the Kentucky Speedway in Sparta, KY meets that criteria.

The bill also allows each licensed facility to operate an onsite retail sportsbook and file an online wagering application. New applications to use a mobile device to wager would have to be made in-person at the affiliated retail venue by January 1, 2023.

All sportsbook operators adjusted gross revenue (AGR) for retail onsite facilities would be taxed at 10.25%, 5% being allocated toward Kentucky racing development funds. Under the guidelines of the bill, the state would tax online wagering at 14.25% of AGR.

Potential Roadblocks

Kentucky legislators are likely to prioritize other current COVID-19 bills. Issues that may demand more input and authority over emergency executive orders. Lawmakers also must pass a one-year budget this year since the General Assembly held off from passing a two-year plan last March, due to an unpredictable economic forecast because of the pandemic.

Also leading Republican lawmakers like Kentucky Senate President Robert Stivers II (R, Manchester) have said that historic horse racing would take precedence over sports gambling when it comes to gambling issues in the state. The legality of HHR, which benefits the racing industry and its many jobs in Kentucky, was called into question last September when the state Supreme Court found at least one brand of HHR game that has operated in the state is not pari-mutuel, in turn, making it illegal. HHR games resemble slot machines.

The good news for Kentucky sports bettors this time is rising unified support from both Republicans and Democrats along with continued rallying support from Gov. Beshear, likely advancing legislation for sports wagering in 2021.