Legislation that will authorize retail and online sports betting sites in the Bluegrass State is on its way to the desk of wager-friendly Gov. Andy Beshear.
House Bill 551 passed its final vote in the Kentucky Senate Thursday evening by a margin of 25-12.
Among other things, HB 551 requires that Kentucky sports betting be offered by the state's nine horse racing tracks, with wagering regulated by the Kentucky Horse Racing Commission. Each track will have permission to partner with up to three online betting sites, for a maximum of 27 operators.
The tracks will all have to pay an initial $500,000 licensing fee and an annual renewal fee of $50,000, while mobile operators will have to pay a $50,000 licensing fee and a $10,000 annual renewal fee.
"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 President and CEO Bill Miller wrote in a March 28 letter to Kentucky state senators.
Miller also noted recent geolocation data complied by GeoComply, which found there were more than 295,000 attempts in Kentucky during the first weekend of March Madness to access legal sportsbooks in other states. That suggests a fair amount of interest in event wagering in Kentucky.
Senate Majority Floor Damon Thayer carried House Bill 551, sports betting in the Senate. Below is his statement upon the chamber's approval: #kyga23 pic.twitter.com/jLinXQ9teX
— KY Senate Majority (@KYSenateGOP) March 30, 2023
The passage of the bill, and the very high likelihood that Beshear will sign it into law, put Kentucky on the cusp of becoming the 37th state to legalize sports betting. Moreover, Kentucky sports betting will build on the state’s rich horse-racing tradition and the pari-mutuel wagering associated with the sport of kings.
"Sports betting is something I have wanted for Kentucky for a long time because I view it as an extension of our time-honored tradition of betting on horse races," Senate Majority Floor Leader Damon Thayer said in a statement following Thursday's vote. "I look forward to Kentuckians being able to place their wagers right here in the commonwealth instead of traveling across state lines to spend their money in other states."
Kentucky also stands to profit from sports betting with wagers placed at retail sportsbooks having a tax rate of 9.75%, while online bets will be taxed at a 14.25% rate. Those figures are comparable to most other legal US markets, with many states sitting between 10 and 15% on retail and the mobile tax number coming in the top third of all current legal markets.
Rep. Michael Meredith — HB 551’s primary sponsor — estimates that sports betting will generate roughly $23 million in annual revenue, with about 2.5% of that cash flow going toward a state problem gambling fund.
Thursday’s vote also puts to rest the debate over whether to legalize sports betting in Kentucky at all. The state’s lawmakers have grappled with that decision for years and faced considerable pushback again in 2023 from concerned groups.
“We love our sports in the commonwealth,” added Thayer. “And people want to be able to make the choice — of their own free will — to make a wager on a sports event, like almost all of our surrounding states.”
With contributions from Justin Byers.
