During the closing days of last year’s legislative session in Kentucky, supporters of a bill to allow online sports betting cautioned that if their legislation faltered, the state would be leaving money on the table for its neighbors — most of which already have legal online sportsbooks.
The supporters also warned back in April 2022 that neighboring Ohio — a state with a much greater population and within easy reach of a large number of Kentuckians — would launch sports betting on January 1, 2023.
In the end, the bill fell just short of the support it needed in the state Senate to become law. And Ohio’s two-day opening over the New Year’s holiday was larger than any other state over the same period, including New York.
Now, Kentucky sports betting supporters are back, and they have a new bill — HB 106. And like the three bills like-minded colleagues introduced during 2020, 2021, and 2022 sessions of the Kentucky General Assembly, online poker — not online casino gaming — is along for the ride.
Seven Tracks Could Offer Sports Betting
Reps. Derrick Graham (D-Frankfort), Rachel Roberts (D-Newport), and Cherlynn Stevenson (D-Lexington) introduced HB 106 on January 5. Their support is noteworthy, even in a state legislature dominated by Republicans — last month, Kentucky House Democrats elected Graham as floor leader, Stevenson as caucus chair, and Roberts as whip.
The bill currently doesn’t have an official name other than “an act relating to wagering and making an appropriation therefor.” It was immediately referred to the House Committee on Committees.
Under HB 106, sports betting would fall under the dominion of the Kentucky Horse Racing Commission (KHRC) and be conducted through seven horse racetracks in the state. The tracks are:
- Churchill Downs, in Louisville
- Ellis Park, in Henderson
- Keeneland, in Lexington
- Kentucky Downs, in Franklin
- Oak Grove, in Oak Grove
- The Red Mile, in Lexington
- Turfway Park, in Florence
Two tracks — Oak Grove and The Red Mile — are for Standardbred racing. The remaining five are for Thoroughbred racing.
Each track would be allowed one online skin and could build up to two retail sportsbooks within a 60-mile radius of the track, but not on property adjacent to it. A track would not be allowed to site one of its retail locations within another track’s zone without the affected track’s permission.
Online sports betting would be taxed at 14.25% under HB 106, while retail sports wagers would be taxed 9.75%. Operators would pay an initial licensing fee of $500,000, and annual renewals would cost $50,000.
HB 106 also allows online poker and wagers on fantasy sports contests. Neither would be required through a partnership with a track.
While the bill makes no specific authorization for multi-state poker, it does call for online poker operators to pay an initial licensing fee of $250,000, with annual renewals costing $10,000. Online poker would be taxed monthly at a rate of 6.75%.
Fantasy contest operators would be required to pay an initial registration fee of $5,000 under HB 106, with annual renewal costs of either 6% of adjusted gross revenue for the prior calendar year or $5,000, whichever is greater.
HB 106 has similar fee structures and other provisions that were included in HB 137, HB 241, and HB 606 — bills that were introduced (and subsequently failed) during 2020, 2021, and 2022 legislative sessions, respectively.
Supporters Don’t Have Much Time
Backers of HB 106 will face more difficulty getting their bill across the finish line in 2023 than previous efforts in 2022 (and 2020). That’s because of two quirks in the state constitution.
The first quirk is the constitution’s stipulation that the legislature meets for just 30 days in odd-numbered years instead of 60 days in even-numbered years. On March 30, the Kentucky General Assembly will adjourn.
The second quirk is related to the first — in odd-numbered years, the constitution also requires that any bill that would increase revenue (like HB 106) must also win three-fifths support in both the House and Senate. That means HB 106 needs approval from 60 House members to advance.
Last year’s gaming bill, HB 606, received 58 votes of support in the House.