Kentucky sports betting regulation got caught in the middle of a political tug-of-war this session.
On Friday, ahead of Monday’s final day of session, Kentucky’s Republican-controlled legislature overrode Democratic Gov. Andy Beshear’s veto of Senate Bill 299, legislation that creates an independent Kentucky Horse Racing and Gaming Commission to oversee gambling including KY sports betting.
The existing Kentucky Horse Racing Commission sits under the governor’s purview as part of the Kentucky Cabinet for Public Protection.
The Senate overturned the veto with a vote of 26-12, with the House following suit, 57-38. SB 299 initially passed the Senate, 26-12, and the House, 64-28. It was one of more than two dozen Beshear vetoes Friday.
Changing Kentucky regulatory agency
Republican Sen. Damon Thayer, who was a driver of last year’s sports betting legislation, unveiled the regulatory reorganization plan in late March. The proposal creates an independent corporation, similar to the Kentucky Lottery Corporation.
The governor would nominate members for the agency’s board of directors but require Senate confirmation.
“Whoever the governor is will still get the right to appoint these positions but there’s going to be more transparency, more integrity, more scrutiny,” Thayer said at the introduction.
New sports betting regulator setup
The new agency would oversee six different areas of horse racing and gambling:
- Pari-mutuel wagering
- Live horse racing
- Breed development and integrity
- Sports betting
- Licensing and investigation
- Charitable gaming
There would be 15 board members, representing a range of industries overseen by the corporation. Employees and equipment of the existing commission will transfer to the new agency.
Beshear veto explained
In his veto message to the legislature, Beshear said the change in structure will require the public agency to focus on generating profits, rather than just oversight. He also said the enacting date of July 1, 2024, is a quick turnaround for the shifts required.
“In helping administer sports wagering in Kentucky, the Public Protection Cabinet and other central government agencies provide significant support services to the Kentucky Horse Racing Comission that would cease under Senate Bill 299,” Beshear wrote in his veto message.
“The bill mandates that beginning with fiscal year 2027, the corporation will no longer receive the $3.7 million from the General Fund and must be self-funded and self-sustaining. This will likely mean increases in assessments on race tracks and fee increases on racing industry licensees.”
Open to some restructuring, just not this one
Earlier this session, Beshear signed House Bill 281 which created a division of sports betting within the Kentucky Horse Racing Commission.
He also did not completely disavow a separate agency, but said it should take more time than SB 299.
“Any effort to create an independent corporation should be drafted, vetted and approved over months,” he wrote. “This version had just days. In its current form, it endangers horse racing, sports wagering and charitable gaming.”
Kentucky sports betting start
Since launching in September 2023, Kentucky sports betting has seen more than $900 million wagered.
Beshear noted in his veto message that Kentuckians bet more than $34 million during the first weekend of March Madness betting.
They also wagered more than $17 million during Super Bowl betting.
