After a contentious election last month ousted Kentucky’s anti-gambling Governor, proponents of legal sports betting in the Bluegrass State are optimistic heading into next year.
Republican Governor Matt Bevin finally conceded the race on November 14, nine days after Democratic opponent Andy Beshear garnered just over 5,000 more votes. The outgoing Bevin – who has gone on record as opposing any expansion of the gambling industry in Kentucky – will be replaced by Beshear on December 10.
And when he officially takes office, Beshear is widely expected to diverge from his predecessor by supporting a sports betting and full-scale casino gambling legalization bill initially introduced last year.
State representative Adam Koenig (R-69) – who serves as chairman of the House Licensing Committee – submitted a sports betting regulation bill within the Kentucky General Assembly in 2018, shortly after the U.S. Supreme Court repealed a federal ban on the industry outside of Nevada. That legislation failed to clear the committee phase, however, and while Koenig’s second attempt last session did escape his Licensing Committee, the full House of Representatives never held a vote on the matter.
But with Beshear set to assume control over the state’s executive branch, Koenig is hoping to see the legislative side take a common-sense approach to sports betting.
Koenig Pledges to File Gambling Expansion Bill in 2020
In an interview with the Lexington Herald-Leader – which recently published an op-ed calling on the General Assembly to act in the state’s best interest by expanding and taxing gambling – Koenig offered a practical rationale for regulating the current black market serving local bettors:
“For me, it’s about something that grown adults do on a regular basis and the vast majority of them would like to do it legally.
A lot of other states jumped on the bandwagon and have been having a lot of luck and success.”
Of the 18 states to legalize sports betting since May of 2018’s landmark Supreme Court ruling, four directly border Kentucky. West Virginia and Indiana launched legal sportsbooks in August of 2018 and September of 2019, respectively, while Illinois and Tennessee have laws on the books which are awaiting implementation.
In hopes of remaining competitive with the state’s regional neighbors, Koenig’s planned 2020 sports betting bill would assign the Kentucky Horse Racing Commission with licensure and regulation duties. Brick and mortar sportsbooks located within horseracing tracks or the Kentucky Speedway would pay taxes at a rate of 10.25 percent on gross gaming revenue, while revenue from online / mobile wagering would be taxed at 14.25 percent.
According to Koenig, the higher tax for online / mobile sportsbooks is designed to encourage operators to invest in their brick and mortar bet shops, which in turn supports Kentucky’s prized horseracing industry:
“You give the lower rates to get them in the house, in the building, where people are interested in wagering on sports but might not be interested in horse racing and they might get more interested in our signature industry.”
Koenig’s optimism is understandable given his history of supporting gambling expansion, but House Speaker David Osborne (R-59) told the Lexington Herald-Leader that he isn’t sure with a Republican supermajority in both chambers:
“There is a renewed interest in sports wagering, particularly as neighboring states like Tennessee pass it. However, it is still unknown if it has enough votes to pass both chambers.”
Governor-Elect Lends Crucial Support for Sports Betting Passage
One week before moving into the Governor’s mansion, Beshear told the Lexington Herald-Leader that he is fully onboard with Koenig’s latest legislative efforts:
“We need to pass expanded gaming in Kentucky. We lose out on hundreds of millions of dollars a year.
We need to legalize sports betting, casinos, fantasy sports and prepare for online poker, and use the revenue from these activities as a dedicated funding stream for our public pension system, which will free up that money for other things we need to be investing in.
I look forward to talking with Rep. Koenig on his proposed bill and working together.”
Beshear isn’t alone in warming to the issue either, as Senate Majority Leader Damon Thayer (R-17) also told the newspaper that he would be happy to add sportsbooks to Kentucky’s legal gambling industry:
“I’m 100 percent in favor of sports wagering.
We already have legalized gaming. It’s just an extension of our history and culture here.
I think it will bring in new customers and some new revenue, which we can use for the pension system.”