Kentucky Legislators Nearing Consensus On Early Bill

The Future Of Kentucky Sports Betting Legislation Is Underway

Kentucky sports betting

A group of state lawmakers is close to finalizing a Kentucky sports betting bill it plans to pre-file prior to the start of next year’s legislative session.

The bill would include mobile and online wagering, as well as betting at brick-and-mortar facilities.

“We are definitely having a conversation with all types of entities to make sure we have a full sports betting bill complete with mobile wagering,” State Sen. Morgan McGarvey told Legal Sports Report.

In June, nine members of the legislature formed an unofficial panel to explore the issue of sports betting coming into the Bluegrass State. The Kentucky sports betting panel represented both parties, and included rural and urban legislators.

“When you talk about any gambling issue in Kentucky, the divide is deeper between urban and rural than Democrats or Republicans,” McGarvey said.

Who’s pushing the issue?

Here’s a list of lawmakers on the panel:

Representatives

  • Jason Nemes (R-Louisville)
  • Diane St. Onge (R-Fort Wright)
  • Kim Moser (R-Taylor Mill)
  • John Sims (D-Flemingsburg)
  • George Brown (D-Lexington)
  • Dean Schamore (D-Hardinsburg)

Senators

  • Julie Raque Adams (R-Louisville)
  • Morgan McGarvey (D-Louisville)
  • Julian Carroll (D-Frankfort)

Leading the issue in the Republican-controlled Senate is Adams, while McGarvey is pushing the issue with the Democrats in the superminority.

Earlier bills gained little traction

Existing bills filed by Sims (House Bill 536) and Carroll (Senate Bill 22) failed to progress during the legislative session and remain stuck in committee. Carroll prefiled a bill similar to his earlier effort for the 2019 session.

McGarvey said it’s not uncommon for Kentucky to take more than one legislative session to pass major issues.

“With this past session, I don’t think people were all that opposed to sports betting but we hadn’t really discussed the issue and the U.S. Supreme Court had yet to rule,” McGarvey said.

The Supreme Court struck down PASPA in a landmark decision May 14, opening the door for states to draft their own sports betting laws. By then, most states only had a few weeks left in their respective sessions.

It’s unknown if the existing bills will be revisited since they both take a different approach to legalization.

Path to a Kentucky sports betting bill

Jeffrey Standen, a professor of law at the Chase College of Law at Northern Kentucky University, said the state constitution does have an exemption for lottery games and could be the easiest road to legality.

“I think [the statute] is broad enough to allow the legislature to create sports betting without amending the constitution,” Standen said.

Nemes said the panel feels the same way.

“None of us think [sports betting] requires a constitutional amendment. In Kentucky, the lottery is part of our constitution and it’s not a game of chance so it would only require a statutory change,” Nemes said.

Courting the equine set in Kentucky

A key ally in any type of sports betting legislation is the deep-rooted Kentucky horse racing industry.

Churchill Downs Inc. (CDI), the state’s largest racing entity and host of the Kentucky Derby, arrived in the legalized betting industry with its acquisition of Lady Luck Casino in Vicksburg, Miss.

Laura Holoubek, an attorney with Dinsmore and Shohl in Lexington, said while there is a lot of appetite for sports betting, it’s the horse racing industry legislators need on their side.

“If the horse industry is not on board, [legislators] will struggle to get anything done,” Holoubek said.

Previous bills looked at allowing the Horse Racing Commission to “institute a system of sports wagering,” while others would give oversight to the Lottery Corporation.

But according to Nemes, any bill would include language to create an independent agency to regulate sports betting.

“We plan on putting together a gaming commission which is separate from the Horse Racing Commission and the Lottery Commission,” Nemes said. “We are not invested in introducing monopolies.”

Next steps to Kentucky sports betting

Much like Illinois, Indiana, Iowa, Kansas and Ohio, Kentucky plans on revisiting the issue extensively following the November midterm elections.

However, unlike states like Illinois — which could see huge turnover in elected officials — Nemes said November elections might not factor in as much to the prospects for passing a bill.

“This really is more of a urban and rural issue rather than a Republican or Democrat one,” Nemes said.

It appears that Kentucky is embracing the evolving sports betting landscape, which includes mobile and online sports betting.

“If we set this up, it has to be the right legislation that can stand for 100 years, not 100 days,” McGarvey said. “The future of gaming is on mobile devices.”

Nicholaus Garcia
- Nick comes from West Texas where he graduated from Texas Tech University with a degree in psychology. After a five-year stint in Chicago, where he wrote about local politics and graduated with a master’s degree in journalism from Columbia College Chicago, he moved to Washington, D.C. to write about issues related to gambling policy, sports betting and responsible gaming.