Will Kentucky sports betting get the green light this year?
The combined efforts of Gov. Andy Beshear and Rep. Adam Koenig may be just the push Kentucky needs to turn a proposed bill into reality.
Kentucky sports betting in 2021
Sports betting was one topic Gov. Beshear addressed on Kentucky Educational Television during a recent Governor Andy Beshear: First Year Reflections interview.
In the discussion, Beshear reflects on the proper time to move a Kentucky sports betting bill into legalization, saying:
“I believe the time was right years and years and years ago when virtually every state around us – all Republican states – already have it. We talk about having a competitive business climate but right now we’re not allowing business that every state around us is. The fact is you can drive right across the border – virtually any of our borders – and on your cell phone make a bet, and a dollar or a percentage of that bet is going to go to those states for their roads and bridges, for their schools and for other needs. The fact that we haven’t done it at this point is not only silly but puts us at a competitive disadvantage.”
The economy crash caused by the current COVID-19 pandemic has made the need for tax revenue more pronounced than ever. Beshear sees sports betting as a logical way to begin bridging the gap.
In Kentucky’s neighboring state, Tennessee, over $2.3 million in tax revenue was brought in during the first month of legalized sports betting alone.
Legal sports betting states bordering Kentucky
If Kentucky doesn’t get on board soon, it may miss the proverbial boat when it comes to sports betting legalization in the south.
A short drive in any direction across the state’s borders gives Kentucky residents access to legal wagering markets. Five of Kentucky’s seven bordering states have already legalized and launched sports betting:
- West Virginia
- Virginia
- Tennessee
- Illinois
- Indiana
The other two bordering states – Ohio and Missouri – are well on their way. Ohio will yet again push for legalization this year, and Missouri has seen three bills pre-filed for 2021.
HHR machines must be addressed first
Rep. Adam Koenig is sports betting’s primary advocate. Previously, he proposed a bill in 2020, though it ultimately died on the committee floor. Koenig will try again this year with a new set of obstacles.
Legislators must first address other gaming-related issues before sports betting discussions see the light of day.
Back in September, the Kentucky Supreme Court unanimously ruled that certain historical horse racing (HHR) machines were not permitted under state pari-mutuel wagering laws.
In order for Kentucky gaming parlors to continue utilizing HHR, these machines must either be altered to adhere to current regulations, or the law itself must be amended to permit the machines in question.
The importance of HHR machines in Kentucky
HHR machines are an integral part of Kentucky’s economy, producing the majority of revenue from the state’s $2 billion gaming industry. A ban on these machines jeopardizes a significant portion of 2021 state tax revenue.
Kentucky generated over $52 million in tax revenue from HHR machines in the past nine years.
Moreover, this puts the state’s entire horse racing industry at risk. HHR machine revenue helps fund competitive purse winnings that keep racetracks open. Since 2011, the horse industry has accumulated $717 million in proceeds from such machines.
Beshear said:
“Historic horse racing is something that’s absolutely necessary if we want to continue to be the thoroughbred capital of the world. It supports thousands upon thousands of jobs and it’s time for the Senate and the House to step up and do right for an industry that we cannot let go somewhere else.”
Kentucky’s General Session is condensed to 30 days this year, which may severely limit time available for sports betting discussion. The Kentucky General Assembly began session hearings on Tuesday, Jan. 5.
Legislators have until March 30 to address the subject. Otherwise, Kentucky sports betting will be shelved again until next year.
The big picture for Kentucky gaming
Historical horse racing and sports betting legalization may not be first on Kentucky’s gaming industry agenda, but the items are certainly not last. Ultimately, Gov. Beshear would like to see casinos legalized, noting increased tax revenue as the primary benefit.
Without casinos, Beshear feels Kentucky is losing out on important tax dollars that would benefit local communities.
“Let’s go ahead and do full casino gaming. Indiana has it. They make hundreds of millions of dollars a year in revenue. We ought to do that.”
Until the state sees legalization, Kentucky’s gambling population will continue to funnel money into surrounding jurisdictions.
“I’m willing to start with sports betting, but how about we compete with West Virginia, Pennsylvania, Indiana, Ohio and Missouri that all have casinos at or near our borders.”
If Kentucky has any hope of legalizing sports betting this year, legislators will have to make good use of General Assembly time.
A smooth transition into HHR and sports betting could generate generous tax revenue and pave the way for subsequent initiatives.
