Gov. Andy Beshear placed the first legal Kentucky sports betting wager Thursday morning at Churchill Downs Racetrack, as tracks take center stage in the Bluegrass State.
In-person Kentucky sports betting operates strictly at racetracks across the state.
“We are the horse capital of the world, it is our signature industry,” said Jim Goodman, director of wagering development at Keeneland. “Having sports betting at racetracks helps the horse racing industry as opposed to opening it up to (outside sportsbooks) to come in and build a brick-and-mortar facility not associated with a racetrack.”
Kentucky sports betting market potential
In-person Kentucky sports betting has a three-week head start over online betting. There is little question mobile wagering will be more popular when it launches on September 28, squarely in the middle of NFL betting.
Online wagering accounts for 94% of all US sports betting volume in 2023. Kentucky figures to produce a similar split between online and in-person wagering.
“We understand the trends. The trends are mobile,” Darren Rogers, Churchill Downs senior director of media services, told LSR. “But we are happy to offer the amenities here at Churchill Downs.”
LSR projections show Kentucky sports betting apps handling between $2.5 billion and $2.9 billion online annually. Legislative estimates have the state collecting $23 million in annual tax revenue from sports betting.
Popular locations for Kentucky sports betting
One of the biggest questions the racetracks will be looking to answer is how popular their in-person option can be.
“We have a unique situation where we are bringing in 10-20,000 people per day for a short period of time. Does it make sense for us to have a sportsbook year-round? Does it make sense to have a sportsbook only during live racing? A lot of questions need to be answered,” Goodman said.
Keeneland is partnering with Red Mile Gaming & Racing. The pair will offer a Caesars-branded sportsbook in Lexington.
Red Mile is 1 mile from downtown and the University of Kentucky campus. Goodman told LSR Red Mile’s proximity to the population center made more sense for a brick-and-mortar operation. Keeneland is 6 miles outside the city center.
Part-time racetrack, full-time sportsbook?
During Keeneland’s spring racing meet last April, 200,000 people visited the track over 15 days.
According to Goodman, its upcoming fall meet runs most of October and will average more than 12,000 visitors per day.
“We have this traffic for two months, but how many people would drive to Keeneland in January to bet on football?” Goodman said. “If we have a nice facility at Red Mile that is handy to the people downtown and the UK campus, does it make sense to do something out at Keeneland?”
Foot traffic at the track
Churchill Downs, home of the Kentucky Derby, will operate its in-person sportsbook year-round at the storied Louisville racetrack.
It welcomes 1.5 million visitors annually across its 70 days of live racing. Around 250,000 fans visit the track between Kentucky Oaks and Derby Days each spring.
The 68 other days of racing average over 18,000 fans per day.
“If sports betting is the avenue to get them here, anytime you can bring someone onto our grounds here at Churchill Downs, that is a positive for engaging them in horse racing,” Rogers said.
Per capita Kentucky sports betting
LSR data shows in-person betting is primarily driven by location, rather than the type of retail establishment.
Given the number of in-person betting options and their locations, LSR projections place per capita sports betting in Kentucky between $50 and $75 at retail sportsbooks each year. The nationwide average per capita betting at in-person sportsbooks outside Nevada is $41.20.
“There are very enthusiastic sports bettors in the state,” Rogers said. “They love their horse racing, they love their basketball, and now they are going to be able to mix both here at the track.”
With an in-person market of around $300 million, overall Kentucky sports betting handle is projected to approach $3.2 billion annually.
On-track for in-person success?
Two of the more popular in-person betting locations at racetracks are in New Jersey. Still, the Garden State is one of the largest sports betting markets in the United States, with online wagering accounting for 95% of all sports betting.
The Meadowlands sits outside New York City and has generated an estimated $158.5 million in 2023 handle. It is home to one of the nation’s more popular harness racing circuits.
Monmouth Park hosts thoroughbred racing at the Jersey Shore, a popular tourist destination during the summer. Its in-person sportsbook has handled an estimated $27.4 million in NJ sports betting dollars this year.
West Virginia sports betting can be done in-person at racetracks, too. Its retail market is one of the nation’s largest, with more than 10% of sports betting happening in-person.
