Kentucky saw a renewed attempt at legalizing sports betting in 2021 on Saturday when state Rep. Adam Koenig filed a bill to this effect. The latest attempt follows the Kentucky Republican’s previously failed bid in 2020.
Last year, the Bluegrass State’s Licensing, Occupations, and Administrative Regulations (LOAR) Committee, chaired by Koenig, unanimously approved the sports betting bill. However, the proposal never received a floor vote in the House. But, this attempt is more optimistic as it is supported by Gov. Andy Beshear, who urged the state legislature last month to legalize sports betting in 2021.
Sports Betting Bill Details
The Bluegrass State will make another attempt at legalizing online sports betting through the House Bill 241 filed Saturday. The Bill’s sponsor, Koenig, previously sponsored measures for the last two years following the US Supreme Court’s historic decision of nullifying PASPA in 2018, after which the states could, if they wanted, legalize sports betting. Most of the neighboring states have since passed the measure, except Kentucky.
The 2021 version, Bill 241, almost mirrors the last year’s proposal. In addition to regulating sports betting, it also seeks to regulate online poker and daily fantasy sports. The proposal seeks to make the Kentucky Horse Racing Commission the regulator of sports betting in the state. Kentucky’s Public Protection Cabinet would administer daily fantasy, and Kentucky Lottery Corp will regulate online poker.
According to the bill, Kentucky’s horse and harness racing tracks would be eligible to obtain sports betting licenses, in addition to any professional sports venue that seats 50,000 or more spectators. Only the Kentucky Speedway meets that criteria. Each licensed establishment would be permitted to operate a retail sports betting operation and an online application. Anyone who wants to bet through a mobile device would require to register in-person at the concerned retail venue until January 1, 2023.
The legislative measure proposed a tax structure that resembles New Jersey’s as the revenue from retail is levied at a lower rate. Sportsbooks’ adjusted gross revenue from land-based venues would be levied at 10.25%, with .5% of that going toward racing development funds. The online betting would be taxed at 14.25% of AGR.
Formidable Support from Governor
Though the odds are long, Kentucky will be looking to regulate sports betting in 2021 with the backing of the major political player in the state, who in essence guaranteed the legalization of the industry during this year. Gov. Andy Beshear has been very vocal about his pro-gambling stance lately as he had been making public comments since December to persuade Kentucky lawmakers into legalizing the lucrative industry.
In December, Beshear said Kentucky had lagged behind in taking the right decisions towards the industry. “The time was right years and years ago,” Beshear said, stating that Kentucky should have legalized the industry when their bordering states started to. “The fact that Kentucky hasn’t done it at this point is not only silly, but it also puts it at a competitive disadvantage.”
In addition to sports betting, the Democratic governor urged the lawmakers to sanction gambling devices in use at Kentucky’s racetracks, popularly known as historical horse racing machines.
Why Kentucky Must Legalize Sports Betting in 2021?
Kentucky is looking for more tax revenue options in order to rebuild the state economy disrupted by the pandemic. Currently, five of the seven states bordering the Bluegrass State have already legalized the industry. Beshear’s resentment is understandable that Kentucky bettors are still enjoying their favorite pastime while crossing the state, it’s only that Kentucky is not drawing anything from that.
Koenig’s concern is also realistic that lawmakers might not find enough time to pass a bill in 2021 during the odd-year 30-day session started January 5, but the measure must approve for various reasons. In addition to prominent political support, HB 241 finds backers among Kentucky Government Retirees President Jim Carroll, who endorsed it as a “common-sense measure to tax an existing activity in the state while helping fund pensions.”
However, lawmakers must give historical horse racing (HRR) legislation priority as they must find a way to authorize the KHRC to permit the slot-like machines. Last year, the Kentucky Supreme Court ruled that the games do not meet the definition of par-mutuel gaming, forcing lawmakers to create new legislation. In 2020, the HHR machines drew more than $33 million in tax revenue, and Kentucky cannot afford to lose out on its significant revenue source.
Though Historical Horse Racing and sports betting are major priorities in 2021, Gov. Beshear also wants casino gambling in Kentucky, which currently has no commercial casino. Yet, this will likely not happen until after the other gambling industries have been legalized and regulated.