Kentucky sports betting again returned to the forefront of lawmakers’ minds Wednesday during a committee hearing where supporters reiterated arguments for legalized wagering. Though the Feb. 13 meeting of the House Licensing, Occupations and Administrative Regulations Committee resulted in no immediate further action, the hearing underscored the momentum of sports betting in Frankfort.
The committee hearing focused on HB 175, a sweeping gaming expansion bill highlighted by provisions to allow legal sports betting online and through authorized purveyors in-person. Championed by Rep. Adam Koenig and 14 additional cosponsors, the bill would also allow online poker for money and regulate daily fantasy.
“It’s part of our culture, not just Kentucky’s culture but America’s culture, and it’s time to bring this issue out of the shadows,” Koenig said during the hearing.
The bill will now likely go before a vote of the entire licensing committee sometime in the coming days.
On Wednesday Koenig laid out the key tenants of the bill, most importantly tax rates. Exorbitant rates have delayed or restrained sports betting markets in other states, which Koenig has sought to avoid with his bill.
Patterned after New Jersey, which has the nation’s second-most lucrative sports betting market, HB 175 calls for 10.25 percent tax on winnings of in-person sports bets and 14.25 percent on online wagers. Both put Kentucky in range of New Jersey and most other states with legal sports betting.
It also comes in sharp contrast to earlier Kentucky proposals that would have featured some of the nation’s highest tax rates.
Furthermore, the most recent incarnation of the bill lowered licensing fees for would-be sports betting purveyors down from $1 million to $500,000. That will allow more potential entities, such as the state’s horse or automotive sports tracks, to take bets.
Though lauded by many in the gaming industry, the current bill did draw concerns from gaming stakeholders.
FanDuel government affairs manager Stacie Stern questioned the bill’s requirement for online players to first register at a land-based facility. She said it would cause some would-be players on the legal market to stay with black market or offshore offerings, hurting the potential of Kentucky’s regulated sites.
Of the eight states with legal sports betting, only Nevada mandates an in-person registration for online betting. Stern noted Nevada has far more in-person gaming offerings than Kentucky, and lawmakers there are already considering removing that restriction.
Koenig’s bill also prohibits wagers on Kentucky collegiate sporting events, which Stern warned could also hurt sports betting’s potential.
With no professional teams, the University of Kentucky and Louisville athletic programs are the state’s most high-profile sports teams and would likely draw a significant portion of in-state bets. The governing NCAA has itself supported betting on in-state teams during similar legislative discussions in Indiana, acknowledging that legal betting would not corrupt the sanctity of competition some have feared with bills like HB 175.
Koenig expressed openness to Stern’s objections, as well as those by fellow members of the state House of Representatives that spoke during the hearing. Even current provisions to permit specials betting on areas like Academy Award winners were up for further discussion, Koenig said.
Though another step toward legalization, the hearing also highlighted the significant work ahead of lawmakers to pass a major gambling expansion bill. HB 175 now awaits further action, which may include, or run against, moves on a cluster of similar bills.
In large part sparked by the 2018 Supreme Court decision to strike down the federal ban on sports betting, Kentucky lawmakers are undertaking the potentially largest legal gambling expansion initiatives in the commonwealth’s history.
Home to the nation’s most famous horse track in Churchill Downs and most well-known race in the Kentucky Derby, the Bluegrass State has long embraced pari-mutuel horse race betting. But aside from the state lottery and charitable bingo, there are no other means of legal gaming in Kentucky.
With the federal ban on other sports like football and basketball removed, states across the country are now taking up legalization bills. Several are exploring other gaming expansion measures with more urgency than ever before. That includes several of Kentucky’s neighbors including West Virginia, Indiana, Illinois and Indiana, which has in turn spurred greater significant on the topic in Frankfort.
In part due to actions across its borders, Kentucky lawmakers have now introduced four gambling measures in the state House of Representatives as well as a similar bill in the Senate.
HB 175 has received the most attention, as well as public support efforts from multiple members of the bipartisan, bicameral group of lawmakers that back it. It’s far from alone.
HB 190 could also dramatically bolster Kentucky’s gambling offerings by permitting the commonwealth’s first-ever casinos. If HB 175 also comes into law, these facilities would likely become additional epicenters of Kentucky gaming.
Combined with other, more minor adjustments in proposals like HB 43 and HB 12, Kentucky could see a sweeping overhaul of its legal gaming infrastructure.
Many steps remain before that could happen.
Despite its horseracing tradition, Kentucky has culturally and politically been one of the states most opposed to gambling. Influential conservative and religious groups still hold considerable sway in state policy. That includes representatives from the Family Foundation, which spoke out against HB 175 during the Feb. 13 hearing.
Though current Kentucky betting bills have been largely pushed by Republicans, who have touted the revenue potential of legal gambling as a means to assist the commonwealth’s underfunded pension program, the GOP has traditionally been more reluctant to embrace gambling.
That includes Gov. Matt Bevin. Though he filed an amicus brief to the Supreme Court challenge to the federal sports betting ban, he did so mostly on 10th amendment grounds as a means to bolster constitutionally granted state’s rights. He has personally been opposed to gambling in the commonwealth and looms as a veto threat, despite the support from members of his own party.
Even if signed into law, Koenig acknowledged opposition groups would almost assuredly file legal challenges. Some detractors further argue the state constitution prohibits these gambling expansion measures and would argue that position in court to prevent the measures from coming into law.
Those are just some of many challenges any piece of legislation faces, especially something as potentially contentious as sports betting in a state that has been reticent toward gambling.
Still, recent hearings and a flurry of legislation shows gaming expansion supporters are still pushing forward. Kentucky remains one of the focal points, and most likely candidates, to join the sports betting legalization race – potentially as soon as this year.
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