Bill Advancing Sports Betting in Kentucky Passes Committee Hearing
Unleashing Gambling Fever: Kentucky's Progress Towards Legal Sports Betting
The rollercoaster ride of legalizing sports betting in Kentucky kicked off this week, as House lawmakers took the first step, turning the already hot topic into a sizzling debate. The House Licensing, Occupations, and Administrative Regulations Committee greenlit HB 137—the bill bringing sports gambling to the Bluegrass State—by a unanimous vote.
The piece of legislation received bipartisan support with 26 sponsors listed, and Republican Adam Koenig, a staunch gambling advocate, is the bill's lead sponsor. But that's not all—the new Governor, Andy Beshear (Democrat and a sports betting enthusiast), is also on board.
Initially pre-filed in December, HB 137 experienced some critical amendments this week. One significant change addressed the issue of in-person mobile registration, which will now expire in 18 months instead of being a permanent requirement. In addition, the "college carveout" restricting bettors from betting on in-state colleges, specifically Kentucky and Louisville, was eliminated.
In-person registration compromise
The new in-person registration deadline is a concession—the original bill called for a permanent in-person registration rule, like Iowa. However, a recent study by iDEA Growth suggests that such a requirement can restrict the revenue potential of legal sports gambling, limiting the competitiveness of markets, and affecting the tax revenue flowing to state governments.
Adam Koenig told the Lexington Herald-Leader that with this change, gamblers will have access to every app from every track across the state. Competition should, therefore, flourish, Koenig argued.
Should HB 137 pass, it will legalize both mobile sports betting and retail wagering at horse racetracks and professional sports venues. anticipated locations include Churchill Downs and Kentucky Speedway.
🎤🎥JUST IN: #GLIchamber catches up with @repkoenig right after HB137—Kentucky's sports betting legalization—passed the L&O committee by a unanimous vote! #GLIadvocacy put forth their top priority! 🏀🏈⚾️⚽️🥊🏒#BetOnSportsKY#SupportHB137#FundStatePensionspic.twitter.com/5qyJdulo52
- GLI Advocacy (@GLIAdvocacy) January 15, 2020
HB 137 specifies application and renewal fees for operators, as well as tax rates on sports betting at professional venues and racetracks, mobile platforms, and gross gaming revenue. If enacted, the legislation would pave the way for a new source of revenue.
Adam Koenig has championed sports betting in Kentucky since gaming became a states' rights issue back in May 2018. While his bill failed to pass last year, talks about sports betting have been ongoing for a couple of years now. Last week, Beshear addressed sports betting in his State of the Commonwealth address and expressed his support for it—making him the first governor this year to openly endorse the idea for his state.
Beshear on gaming: 'We are being left behind'
Like all Kentuckians in state government, Beshear is on a mission to address a massive pension shortfall. However small, sports betting revenue could chip away at this daunting hole. He campaigned on a pro-gambling platform and maintained this stance in his speech on Tuesday.
Results vary when governors openly support sports gambling—with Pritzker signing Illinois sports betting into law and governors in Connecticut, Massachusetts, and New Hampshire supporting the move last year. Yet, only two of these states, Illinois and New Hampshire, were able to legalize gambling in 2019.
Four of Kentucky's border states have legalized sports betting, with the practice being live in West Virginia since summer 2018 and in Indiana since September 2019. Missouri, Ohio, and Virginia are yet to follow suit, but initiatives are underway in their respective capitals.
Anti-gambling group voices concern
The conservative Family Foundation expressed concerns earlier this week about sports betting being an expansion of gaming and requiring a constitutional amendment. However, lawmakers are siding with Koenig, who dismissed this idea as a "red herring" during a joint committee meeting last December.
Thanks to Kentucky's even-year revenue bill requirements, HB 137 may have a greater chance of success in 2020 compared to the previous year when revenue bills needed a steep three-fifths majority to pass. The bill is scheduled to move to the House floor imminently, with its first reading expected tomorrow. If it passes the House, it will be sent to the Senate for similar procedures. Any amendments must be agreed upon by both chambers before it reaches Beshear's desk. Provided he signs the bill, it will take effect, transforming Kentucky's gaming landscape and potentially reshaping its economic landscape as well.
- The compromise on in-person registration for mobile sports betting in HB 137 will allow gamblers access to every app from every track across the state, potentially leading to increased competition in the sports betting market.
- If HB 137 is enacted, it will legalize both mobile sports betting and retail wagering at horse racetracks and professional sports venues, likely including Churchill Downs and Kentucky Speedway.
- The legislation specifies application and renewal fees for operators, as well as tax rates on sports betting at professional venues, racetracks, mobile platforms, and gross gaming revenue, potentially paving the way for a new source of revenue for the state.
- The Family Foundation, an anti-gambling group, has expressed concerns about sports betting being an expansion of gaming and requiring a constitutional amendment, but lawmakers seem to side with bill sponsor Adam Koenig, who views this as a "red herring."
