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Kentucky sports betting bill passes House

The front gate of Churchill Downs against a bright blue sky
Jacob Munoz
House Bill 551 would allow licensed horse racetrack associations, including Churchill Downs, to partner with sports gambling companies and offer betting for a variety of sports.

House lawmakers passed a bill that would expand sports betting in the commonwealth after years of failed attempts.

With just days left in Kentucky’s 2023 legislative session, House Bill 551 is headed to the Senate. Representatives voted 63-34 to expand legal sports betting through the bill.

The proposed legislation would make the Kentucky Horse Racing Commission the state’s sports wagering regulator. The commission would grant licenses to horse racetrack associations, allowing them to work with sports gambling companies like DraftKings and FanDuel. Those companies aren’t currently allowed to operate in the state.

Anyone 18 years or older in the state could go online or to track facilities to bet on events, including professional and college sports games and esports matches. Revenue collected from online wagers would be taxed at 14.25%, higher than on-site wagers at 9.75%.

The only form of sports betting that’s legal in the commonwealth is horse race wagering at racetrack venues.

The legislation will now head to the Senate for discussion.

Republican Rep. Michael Meredith of Oakland, the bill’s primary sponsor, said during debate Monday that state researchers found sports betting would eventually bring about $23 million in state tax revenue each year.

“This does create a regulated marketplace for sports wagering. Taking sports wagering in Kentucky out of the shadows, out of the darkness, and moving it into the light,” Meredith said.

Republican Rep. Michael Meredith, HB 551's primary sponsor from Oakland, argues for the bill on the House floor Monday.
Legislative Research Commission
Republican Rep. Michael Meredith, HB 551's primary sponsor from Oakland, argues for the bill on the House floor Monday.

State revenue from expanded gambling would fund its regulation, and 2.5% would be allocated for a state-run resource to combat addictive gambling. The leftover revenue would go to Kentucky’s pension fund.

Rep. Josh Calloway, a Republican from Irvington, cited the risk of gambling addiction as he spoke against the bill.

“When you have to lose money to gain money, that is an irresponsible way to drive revenue in our state,” Calloway said.

Calloway also said he expected the bill to pass and offered two amendments that would’ve raised the gambling age from 18 to 21 and prohibited credit card purchases, but both measures failed.

After the U.S. Supreme Court overturned a federal ban on sports gambling in 2018, many states adopted new laws to regulate betting. That includes most of Kentucky’s neighbors, including Indiana, which sometimes draws Louisvillians crossing the Ohio River to make bets on games like University of Louisville football and basketball matches.

There’s been at least one bill each year since 2019 in Kentucky’s General Assembly aimed at legalizing sports betting. Last year the House advanced a similar bill, but the Senate did not pass it.

031323_Josh Calloway sports betting bill_Courtsey Legislative Research Commission
Legislative Research Commission
Republican Rep. Josh Calloway, of Irvington, argues against the sports betting bill on the House floor Monday. He also introduced two amendments to the bill that were both defeated.

Unlike that bill, HB 551 doesn’t attempt to legalize fantasy sports or online poker. It also prevents sports gambling companies from operating independently of racetrack associations.

The Kentucky Chamber of Commerce named sports wagering one of its legislative priorities this year, calling for a constitutional amendment that would allow Kentuckians to vote on expanding legality. It also said that any legislation “must protect existing signature industries and racing facilities.”

The Family Foundation, a conservative Christian public policy organization in Kentucky, said in a press release after the vote Monday that “the expansion of predatory, government-sponsored gambling in HB 551 is a lose-lose for Kentuckians, especially for children,” and called on the Senate to stop the bill.

Martin Cothran, a spokesperson and senior policy analyst for the group, said in a 2020 Courier Journal op-ed that sports betting goes against the state constitution and legalizing it would require voters to approve an amendment.

Jacob is LPM's Business and Development Reporter. Email Jacob at jmunoz@lpm.org.

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