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Kentucky sports betting: What to know about proposed bill
6th February, 18:18There's a lot of confusion about sports betting in the commonwealth. Here's what to know about the proposal now before the legislature and what could happen if the bill becomes law:
Your guess may be as good as those of the experts. Estimates vary and projections have proved unreliable in other states. Rhode Island authorities projected $11.5 million in tax revenue in the first fiscal year of sports betting, but received only $150,000.
Rep. Adam Koenig, R-Erlanger, who has led the push in the Kentucky House of Representatives, has pegged the potential tax revenues at $22.5 million per year. But Jason Bailey, executive director of the Kentucky Center for Economic Policy, said in September that Kentucky's tax revenues from sports betting would likely yield less than $10 million annually.
"In the context of the $11 billion state budget, that's really a rounding error," Bailey said. "It's not real money that would make a difference in a budget situation. We're not against it, wouldn't take a position against it, but don't think it's a real solution to the budget challenges we face."
Read this: Bill that would legalize sports betting in Kentucky is in doubt ... if not 'in trouble'
The current version of House Bill 137 would allow wagering on the outcomes of professional and college games "and other events" that would include professional golf tournaments, motor racing, World Cup Soccer, the Olympics, etc. Additionally, proposition bets such as the result of a baseball at bat, a field goal attempt, a coin toss or "the color of a coaches' tie," would be permitted subject to the approval of the state racing commission.
An earlier draft of the bill prohibited wagering "upon any collegiate sporting event in which a Kentucky collegiate team is competing." That ban has since been removed.
Additionally, other forms of gambling provided for in the bill are online poker and fantasy sports.
Koenig says there would be no wagering on high school sports.
Though new Gov. Andy Beshear favors bringing casinos to Kentucky, advocates in the legislature view it as a long shot, at least on the short term. Senate President Robert Stivers and Senate Majority Leader Damon Thayer released a joint statement in October declaring casinos "unequivocally off the table."
"We want to be abundantly clear: There is absolutely no chance any such effort would pass the Senate in an upcoming session," they said. "Any bill proposing casino gambling would be dead on arrival."
Fact Check: Would casinos bring $550 million in annual tax revenue for Kentucky?
Right now, Kentucky residents can bet on sports through illegal and offshore bookmakers and in those states where sports betting is legal, including Indiana. Should the sports betting bill become law, wagering would eventually be available through licensed racetracks and the Kentucky Speedway. To encourage attendance (and spending), a lower tax rate would be available for in-person betting, but mobile applications would likely generate the bulk of the business.
More: Sports betting is legal in Indiana. Here's everything you need to know about it.
Since licensees would cost $500,000 up front, plus a $50,000 annual renewal fee, the biggest beneficiaries figure to be the businesses taking bets. Nevada's sportsbooks showed an $18.7 million profit off $154.6 million bets on Super Bowl LIV.
Kentucky's piece of the action would include a 9.75% tax of gross revenues on wagers placed in person and a 14.25% tax on online and mobile wagering. Additionally, a 0.5% tax would be applied to the adjusted gross revenues on wagers placed at a licensed track, to be allocated to the Thoroughbred and Standardbred Development Funds.
An amendment introduced in January clarified that 5% of all funds deposited into the wagering administration fund will be devoted to Kentucky's problem gambling assistance programs. Remaining funds are to be dedicated to the Kentucky permanent pension fund "after necessary administrative expenses."
If the deal gets done, absolutely. Online wagering accounts for about 80% of bets placed legally in New Jersey, according to figures released by the state. Given its relatively remote location and irregular event schedule, Kentucky Speedway is depending on mobile revenues to justify its investment.
According to the University of Nevada-Las Vegas Center for Gaming Research, more than 80% of legal sports wagers placed in Nevada are on football, basketball and baseball. But wherever there's interest, there's sure to be an oddsmaker. In addition to the most popular sports, Caesars Casino & Sportsbook in Indiana offers betting lines on boxing, golf, hockey, mixed martial arts, soccer, tennis and "specials," a category that currently includes the Academy Awards.