One day after the state’s Governor voiced his support for legalized and regulated sports betting, a Kentucky legislative committee responded by unanimously passing a bill to do just that.

Newly elected Governor Andy Beshear – a Democrat who defeated his anti-gambling incumbent Republican rival by just 5,000 votes following a contentious recount – devoted a portion his State of the Commonwealth address on January 14 to endorse legal sports betting in Kentucky:

“A commitment to the future also requires that we create the new revenue to meet the growing needs of our state, and right now we are watching more than $500 million in gaming revenue go across the border to states like Indiana, Ohio and Illinois.

It is time to stop that flow, to use that money for our needs. Rep. Adam Koenig has filed a sports betting bill. I fully support it, and we should pass it.”

Governor’s Words Prompt Immediate Reaction from House Committee

By the end of business on January 15, members of the Kentucky House of Representatives Committee on Licensing, Occupations and Administrative Regulations voted 18-0 in favor of House Bill 137.

The legislation is sponsored by state representative Adam Koenig (R-69), who is making his second attempt to bring regulated sportsbooks to Kentucky after a similar bill failed to gain traction last year. If passed into law, Koenig’s bill would permit Kentucky’s horseracing and auto racing tracks to run onsite sportsbooks, along with online / mobile betting apps operated in conjunction with third-party platforms.

As the Lexington Herald-Leader observed, Beshear’s shout out to Koenig and HB-137 was one of only two instances in which the Governor referenced legislation sponsored by a Republican lawmaker. That public overture to bipartisanship when it comes to legalizing sports wagering apparently had the intended effect, as 11 Republican members of the Licensing Committee joined their seven Democratic colleagues in advancing HB-137 to the House floor for a full vote.

Two years ago, in his previous capacity as Kentucky’s Attorney General, Beshear was a vocal proponent of regulating and taxing the sports betting industry to prop up the Bluegrass State’s struggling pension system. A study by consultancy firm Commonwealth Economics estimates that legal sportsbooks – subject to a tax on “win” revenue of 10.25 percent for physical sportsbooks and 14.25 for their online / mobile counterparts – would send $22.5 million annually into state coffers.

Beshear also used his first State of the Commonwealth speech to frame HB-137’s passage as a necessary step in keeping Kentucky competitive with its regional rivals. While talking up the bill – which would also legalize online / mobile poker and daily fantasy sports (DFS) – Beshear referenced Kentucky’s regional isolation in terms of lacking legal gambling options like casinos and sportsbooks:

“I hope that isn’t the end of the conversation, because right now all of our neighboring states – all of them – most of them Republican-led, have embraced expanded gaming while we are being left behind,” Beshear added.

Of the seven states which share a border with Kentucky, West Virginia and Indiana have already launched legal sports betting industries, while Illinois and Tennessee have laws on the books awaiting implementation. Since regulated sportsbooks began operation in Indiana last September, gamblers in the state have wagered over $436 million in taxable revenue.

2020 Bill Fixes Prior Mistakes, Allows In-State College Sports Bets

Koenig saw his sports betting bill clear the Licensing Committee – on which he serves as chairman – last session, but the legislation was never taken up for a full vote on the House floor.

While his latest effort is structured similarly to the 2019 bill, Koenig did make a change by axing a previous ban on betting that involves in-state collegiate athletics. Explaining the shift in policy to Legal Sports Report, Koenig pointed to public feedback from bettors living in a state where college sports are king:

“People want to wager on the University of Kentucky and the University of Louisville.

I can make every argument for why we shouldn’t have that restriction.

If someone has to make four bets legally and one with a bookie, they’re just going to make them all with a bookie.”

Jonathan Zaun

One of Gamble Online's first dedicated reporters, Jonathan has spent well over a decade reporting on the gaming industry. While breaking legal news is his main area of expertise, Jonathan is an avid blackjack player & strategist who follows professional poker closely.

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