A bill that would legalize sports betting in Kentucky has been filed, but in a break from previous attempts, it does not include verbiage also to legalize online poker and daily fantasy sports (DFS) betting — just as the bill’s primary sponsor warned in an exclusive interview earlier this year.
Despite those omissions, HB 551 — a bill introduced by Rep. Michael Meredith (R-Oakland) in the state House of Representatives on February 22 — has strong bipartisan support, with six Democrats and six Republicans signing on as co-sponsors. The bill was referred to the House Committee on Committees, where four of the panel’s eight members are co-sponsors of HB 551.
Meredith told Poker Industry PRO in an exclusive interview last month that he was working on an iGaming bill that would include sports betting, but not poker. In a separate report by a television station earlier this month, Senate Majority Floor Leader Damon Thayer (R-Georgetown) predicted DFS would also hit the cutting room floor.
“We removed online poker and fantasy contests, which seemed to be a problem over in the Senate [judging by] the discussions from last year,” Meredith told WLEX-TV in Lexington on Wednesday. “We focused the bill just solely on sports wagering, and we then wanted to make sure that we were able to develop a regulatory structure that would work for the [Kentucky Horse Racing Commission].
“And with it being kind of an emerging industry, we wanted to make sure that operators had a seat at the table, too — to make sure that we were doing things the right way and hoping to avert some of the issues that have happened in other states.”
It is the fifth consecutive year lawmakers have introduced a sports wagering bill.
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What’s In The Bill
Under HB 551, each of the state’s seven horse racetracks and at least two other entities would be allowed to run up to three skins for mobile sports betting. Custom skins under the same brand as the track would be allowed.
Seven horse racetracks would be permitted to launch mobile and online sports betting. They 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
The law’s verbiage would also allow sports betting at Revolutionary Racing Kentucky, an eighth horse racetrack currently under construction in Ashland, and at Derby City Gaming, a historical horse racing venue on the site of the former Louisville Downs track.
That means up to 27 sportsbooks could launch in the Bluegrass State.
Retail sports betting would be taxed at 9.75%, while online betting would be levied at 14.25%.
If the bill were to become law, for the first 12 months after its effective date, bettors would be required to register in person at a retail sportsbook before being able to place a wager online. Remote registrations would be permitted after the law had been in effect for 12 months.
Operators with negative adjusted gross revenue during a calendar month may carry over the negative amount to the return for the subsequent month. Such carryovers are not permitted for a period longer than 12 months.
Racetracks that decide not to contract with a sports betting operator must pay an initial licensing fee of $500,000, with annual renewals of $50,000. Operators would pay an initial $50,000 and be charged $10,000 for renewals.
The bill would allow wagering on in-state college teams, so there would be betting on Kentucky Wildcats basketball.
HB 551 would also designate the Kentucky Horse Racing Commission (KHRC) as the regulator for sports betting. The agency handles horse racing, parimutuel wagering, and historical horse racing. KHRC would also promulgate rules for the state’s sports betting enterprise.
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Bill Has Strong Bipartisan Support
HB 551 already enjoys significant bipartisan support.
The bill was introduced with 12 co-sponsors — six Democrats and six Republicans — with star power on both sides. Among the Democrats who back Meredith’s bill are Minority Floor Leader Derrick Graham (D-Frankfort), Minority Whip Rachel Roberts (D-Newport), and Minority Caucus Chair Cherlynn Stevenson (D-Lexington). House Speaker David Osborne (R-Prospect) also backs the bill.
Osborne chairs the House Committee on Committees, and Graham, Roberts, and Stevenson are committee members. The trio of Democrats introduced a separate iGaming bill on January 8, HB 106, which would have launched sports betting through the state’s seven horse racetracks and online poker via standalone licenses not tethered to a track.
The other House Democrats who co-sponsored HB 551 are Reps. Al Gentry (D-Louisville), Chad Aull (D-Lexington), and Ruth Ann Palumbo (D-Lexington). House GOP Reps. Jared Bauman (R-Louisville), Thomas Huff (R-Shepherdsville), Matthew Koch (R-Paris), Killian Timoney (R-Nicholasville), and Nick Wilson (R-Willamsburg) also co-sponsored the bill.
