- Kentucky television showed a debate on the issue of legal sports betting
- It has traditionally been a conservative state when it comes to gambling
- The state has a thriving horse racing industry
- House Bill 175 would legalize sports betting, online poker, and daily fantasy sports
Kentucky is getting closer to having legal sports betting. Advocates from both sides of this bill debated the issue on television on February 26. The bill is under consideration by the state’s General Assembly.
The debate took place on Kentucky Tonight, which is a show on Kentucky Educational Television. Lawmakers who are sponsoring the bill argued in favor of approval versus a Baptist minister and the leader of the Family Foundation of Kentucky.
The chief argument in favor of passing the bill is the significant revenue that will come from taxes on the activity and go to good causes for the community in the state.
However, the executive director for the Family Foundation is concerned that the impoverished people in Kentucky will fall into deeper trouble if legal sports betting becomes legal.
He said: “Corporations can’t gamble, businesses can’t gamble, non-profits can’t gamble, churches can’t gamble. Only moms and dads and a few single people who may be [parents] at some point. All of the money comes from Kentucky families. That’s where it comes from … gambling only targets the family.”
Kentucky’s history with gambling
Kentucky has had strict measures about gambling for many years. The one exception to this strict stance is for horse racing. The state is well known for the annual Kentucky Derby, and it is one of the leading states in the country for both horse breeding and horse racing.
A state lottery has been operating since 1988 and residents also able to partake in multi-state lottery programs such as Mega Millions. Residents can now also buy lottery tickets online.
Despite numerous attempts over the years, there are no casinos in Kentucky. There has been heavy resistance to casinos, particularly from the horse sector, because they fear their revenues will be put under pressure if casinos became legal.
Seven different racetracks operate in Kentucky. Each year, they bring in about $840m (£631m). The government gets approximately $310m (£233m) of these revenues through taxes. Slot machines help the tracks keep their doors open.
Latest sports betting bill
Sports betting has been considered for some time in Kentucky. Many of the racetracks would welcome such a move because it would boost their revenues.
The latest bill to gain traction on the issue is House Bill 175. State Representative Adam Koenig is leading the charge for this bill, which would also legalize online poker and daily fantasy sports. With a significant black market for sports betting in the state, this is precious revenue the government could spend on good causes if they made the activity legal.
The bill would allow racetracks other sporting venues to get sports betting licenses. They could also have online sportsbooks for users who signed up at one of the physical locations.
The Kentucky Horse Racing Commission would regulate the sector. Each sports betting license would carry a $1m (£752,000) fee. A 10.25% tax would be levied on sports bets at the facilities.
Online sports bets would incur a 14.25% tax. The state could earn as much as $48m (£36m) annually in tax revenues. Bets would be allowed on college sporting events.
With the state currently struggling to close a significant deficit in their pension funds, legal sports betting would be a helping hand. This shortage is with nearly $33bn, which is supposed to be for the state pensions for public workers in the next thirty years.
The chief problem with this bill is that there is not much appetite among lawmakers for allowing online poker. They already have a poor relationship with some in the space. In 2015, the state tried to sue PokerStars for $870m (£654m) after the poker company did not adhere to the federal ban on online poker.
Progress being made?
The bill is making good progress in the Kentucky legislature. It was given unanimous approval by the House committee. If the bill passes both houses, Governor Matt Bevin will likely sign it into law.
He previously had his own version of a sports betting bill in 2018. He is on record as saying that it would be a great way to boost the state’s coffers.
The next immediate step for the bill is to get at least 60 votes from among the 100 House members.