Sports betting sites are coming to the Bluegrass State.
House Bill 551 passed its final vote in the Kentucky legislature last week by a margin of 25-12. The legislation was then signed into law by Gov. Andy Beshear, a longtime supporter of legal sports betting in the state.
“Our dollars were supporting Indiana, West Virginia, Ohio, and other states,” Beshear said during a press conference on Friday. “But now, after years of urging action, sports betting is finally going to be legal in Kentucky. We made it happen.”
Kentucky sports betting will have both retail and online options, among other things. Here’s what you need to know about the state’s new event wagering law and what it means for bettors.
When will legal sports betting start in Kentucky?
That’s still to be determined. H.B. 551 gives the Kentucky Horse Racing Commission six months to establish the regulatory framework for wagering once the legislation goes into effect, which will be in around three months. That would mean the regulatory work would have to be done by late December, early January-ish at the latest.
However, there’s a chance the commission could pull it off before then, as it already works with the tracks that will receive sports-betting licenses. Moreover, H.B. 551's chief sponsor said recently that the agency weighed in on the legislation before it was approved, which could help speed up the implementation process.
“I want to thank the horse racing commission for all their work to help us put together a regulatory structure that I think will protect Kentuckians and make sure we move an industry that has been in the shadows and has existed in Kentucky for many, many years into the light with a regulated and a consumer-protected industry that Kentucky can be very proud of,” said Rep. Michael Meredith, a Republican, during Beshear’s signing press conference.
What’s the age limit for sports betting?
Bettors will have to be 18 or older and physically located in the state to wager.
What sports will be available for betting?
There will be wagering markets aplenty in Kentucky. H.B. 551’s definition of bettable sports events is very broad and only explicitly prohibits horse racing (which residents can still bet on at tracks and using separate horse-racing apps) and amateur youth sports in which most players are under the age of 18.
The new law also says that wagering is allowed on professional sporting events, college sporting events, amateur sporting events, international sporting events (such as the Olympics or World Cup), esports, and anything else regulators deem appropriate.
Where will sports betting be available?
Sportsbooks will be located at horse-racing tracks and online via computers, tablets, and mobile phones. The state’s nine licensed tracks can partner with up to three service providers apiece, meaning there could be as many as 27 sportsbook operators.
“This diversity of operators would not only give Kentuckians a multitude of legal options to choose from, but also eliminate the chance of a single monopoly controlling the market,” American Gaming Association CEO Bill Miller wrote in a letter to state senators last week.
And there it is, Kentucky Gov. Andy Beshear signing a sports-betting bill into law. House Bill 551 will allow the state's nine licensed horse-racing tracks to offer retail and online sports betting, the latter of which they can do with up to three partners apiece. pic.twitter.com/I48NRqFEtR
— Geoff Zochodne (@GeoffZochodne) March 31, 2023
How much money will sports betting make for the state?
Backers of H.B. 551 floated the figure of about $23 million a year in tax revenue and licensing fees.
Tracks must pay an initial fee of $500,000 for a license and an annual renewal fee of $50,000. Service providers must pay an application fee of $50,000 and a $10,000 annual renewal fee.
Licensees will also be subject to a tax on their adjusted gross revenue from sports betting, which will be total wagers minus winnings paid to players and excise taxes paid to the federal government. There are no tax deductions for free bets or other promotions in H.B. 551. Adjusted revenue from retail sports betting will be taxed at a 9.75% rate, and online sportsbooks will be subject to a 14.25% levy.
Where will the money go?
H.B. 551 creates a sports wagering administration fund that will receive the licensing and tax revenue. The fund will in turn fund the administrative costs related to regulating sports betting, in addition to 2.5% of the money flowing to a new problem gambling assistance account and the remainder to the state's permanent pension fund.
