Kentucky Sports Betting Market Exceeding Expectations, Says Governor Andy Beshear

Article ByDavid Weir

December 10, 2023

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Posted in: Kentucky Gambling News, US Gambling News, US Sports Betting News

In an impressive display of success for the state’s first major expansion of gambling in decades, the Kentucky sports betting market is rapidly exceeding revenue expectations.

Since the launch of sports betting in early September, more than $656 million has been wagered, said Kentucky Governor Andy Beshear, speaking over the weekend.

Beshear signed HB551 into law in March 2023, which legalized online and retail sportsbooks in Kentucky. After months of hard work by regulators, he himself placed the first historic wager when the market launched on September 7.

Now the market has seen $656 million wagered in just three months.

“It’s an incredible start, and if it continues, we will significantly exceed the $23 million in projected revenue from sports wagering,” Beshear said.

“These tax dollars will support the oversight of sports wagering, establish a problem gambling fund, and primarily help our pension systems here in Kentucky.”

Shape of the Market

In-person sports betting commenced on September 7, with online sportsbooks beginning to accept wagers on September 28.

The state offers sports betting at 13 retail locations and through seven online platforms, including bet365, BetMGM, Caesars Sportsbook, DraftKings, Fanatics, FanDuel, Circa Sports and, most recently, ESPN Bet.

The Kentucky Horse Racing Commission (KHRC) determined the governing regulations for the market, reviewed applications, and issued licenses before launching. Sportsbook licenses were priced at $500,000 each.

Meanwhile, sports betting revenue is taxed at 9.75% for in-person bets and a significantly higher 14.25% for online wagers. Beshear said this has, so far, resulted in $8 million in taxes for the state’s coffers.

Unlike in many states, sportsbooks’ revenues are not published by Kentucky regulators. For the most part, it has been left up to Governor Beshear to announce total handle figures ad hoc, which is a unique arrangement among U.S. states.

In a variable market like sports betting, that makes it difficult to speculate on tax figures in the long term.

However, limited data releases from the KHRC have provided some details. For one, regulators have revealed that the majority of sports bets in Kentucky are placed online, a trend consistent with other states that offer retail and online sports betting.

Of the more than $656 million in total bets, less than $27 million was wagered at brick-and-mortar sportsbooks.

Political and Social Impact

The introduction of sports betting in Kentucky has not been without controversy.

Conservative lawmakers, who have controlled both chambers of the state legislature since 2017, have historically been opposed to gambling expansion, citing long-held concerns over sports integrity, problem gambling, and crime.

However, Governor Beshear has countered these criticisms by pointing out that much of the state’s newly realized wagering was already occurring through offshore sportsbooks or in neighboring states.

He has consistently argued that legalizing sports betting in Kentucky was simply a way to regulate and benefit from an activity that was already happening, and reiterated that in his statements over the weekend.

“Before we legalized sports betting, this money was going to other states, or the betting was being done illegally,” Beshear said.

“Now, thanks to our efforts, these dollars are staying right here in Kentucky.”

The early success of sports betting in Kentucky not only demonstrates the state’s potential in this industry, but also highlights the shifting attitudes towards gambling in traditionally conservative states.