Kentucky is racing to the finish line to bring legal sports betting to the Bluegrass State.
On Monday, the state’s House of Representatives voted 63-34 in favor of House Bill 551 — a piece of legislation that would legalize both online and retail sports betting. The proposed bill was introduced on February 22 and will now head to the Senate for further consideration.
“This would take sports wagering out of the shadows, out of the darkness, and moving it into the light,” the bill’s primary sponsor Rep. Michael Meredith told members of the House.
HB 551, which needs 23 votes in the Senate, proposes sports betting in Kentucky to be offered by the state’s nine horse racing tracks with wagering regulated by its Horse Racing Commission. Each track across Kentucky would have permission to partner with up to three online betting sites.
HB 551 requires the state’s nine horse racing tracks to pay a $500,000 licensing fee, while online operators will have to cough up $50,000. The bill also proposes the tracks pay an annual $50,000 renewal fee to maintain their licenses, while online operators will dish out $10,000.
Kentucky would also generate revenue through its tax rates with HB 551. Wagers placed at retail sportsbooks would have a 9.75% tax, while online bets would be taxed at a 14.25% rate. Sports betting is projected to generate roughly $22.5 million in annual revenue, per Meredith.
HB 551 will also take steps to curtail problem gambling with an amendment that includes a provision to create a fund. The fund, which would receive 2.5% of the tax revenue made from sports betting annually, would have its proceeds allocated toward problem gambling initiatives.
“Hopefully, that’ll shore up those (votes), and we’ll narrow it down,” Meredith told Casino.org.
Time is of the essence for HB 551 to pass as the current legislative session ends on March 30.
Quite the journey
Despite the bill being approved by the state’s House, the bill could face rejection in the Senate.
Pieces of legislation related to sports betting have been introduced in Kentucky since 2018 but have failed to gain support on the Senate floor.
In 2022, House Bill 606 — a similar sports wagering bill — passed in the House by a 58-30 vote but didn’t receive support in the Senate. Lawmakers opposed HB 606 over concerns it could damage the moral standard of the state and have a negative impact on children and their families.
Back in January, Indiana generated $36.46 million in revenue from sports betting, while Illinois reported $88.5 million in revenue during the same month. Tennessee, which only has online wagering, generated $36.3 million in revenue in January — a 25% increase year-over-year.
Meanwhile, West Virginia posted $3.6 million in revenue during the month behind a handle of $44.7 million.