Kentucky gets serious about implementing sports betting

Kentucky Sports Betting Hearing Highlights Need For Mobile Wagering, Competitive Tax Rate

Kentucky sports betting

The discussion on Kentucky sports betting took a leap forward on Friday, as lawmakers heard testimony from several gaming stakeholders on how to successfully introduce it into the Bluegrass State. 

Members of the Interim Committee on Licensing, Occupations, and Administrative Regulations discussed topics ranging from tax rates, integrity monitoring and best regulatory practices.

The pulse during the hour-long hearing showed some lawmakers are on board with introducing some form of regulated sports betting in 2019.

Senator Julian Carroll and Representative Al Gentry expressed strong support for bringing sports betting to Kentucky.

“It’s a no-brainer,” Gentry said.

Carroll added that he was supportive of sports betting at racetrackslottery locations, and limited kiosks around the state.

What they discussed about Kentucky sports betting

Brendan Bussman, director of government affairs at Global Market Advisors, explained the ins and outs of sports betting in Las Vegas.

Bussman hit on several key topics lawmakers should take into account for any piece of legislation.

  • Competitive tax rates
  • Integrity monitory systems
  • Strong regulations
  • Inclusion of mobile wagering

From a tax rate perspective, Bussman said Kentucky stands to benefit from multiple states releasing data on sports betting revenue numbers.

Additionally, Bussman said mobile wagering could be viewed as a convenience factor for customers. He said it also helps to boost non-gaming revenue at brick-and-mortar facilities.

The joint committee also heard testimony from:

  • Tom Delacenserie, president and CEO, Kentucky Lottery Corporation
  • Brad Cummings, founder and CEO, Equilottery Games
  • Mark Brenner, president, The Poker Alliance

The landscape beyond Kentucky

In the post-PASPA era, Delaware, New Jersey, Mississippi and West Virginia have all established promising sportsbooks.

The New Jersey Division of Gaming Enforcement reported that NJ sportsbooks took in $184 million in wagers during the month of September. That number is up significantly from the $95 million reported for August. NJ now has eight physical sportsbooks up and running, along with eight online sportsbooks/betting apps.

In Mississippi, August numbers failed to tell the entire story but indicated a promising future. Casinos in the Magnolia State took in almost $6.3 million in sports bets with minimal college and professional football. That number stands to increase as Mississippi is the only state in SEC country with legal regulated sports betting.

Who’s flocking to KY and why

Prior to Friday’s hearing, lobbyists from several professional sports leagues descended on Kentucky in preparation for next year’s legislative battle to pass a sports betting bill.

At least one lawmaker views league interest as a positive for the state.

“I think it shows Kentucky is serious about passing sports betting,” said Senator Morgan McGarvey. “They wouldn’t be spending the money on all of these lobbyists if we didn’t have a chance at passing a bill.”

The NBA, MLB and PGA Tour have hired the same 10 lobbyists to convince lawmakers an integrity fee is needed in the Commonwealth.

In a statement to the Herald-Leader, MLB said the Supreme Court decision will have “profound effects” on the league:

“Our most important priority is protecting the integrity of our games. We will continue to support legislation that creates airtight coordination and partnerships between the state, the casino operators and the governing bodies in sports toward that goal.”

What comes next in Kentucky

McGarvey is one of nine lawmakers on a bipartisan panel formed to study the impact sports betting could have on the Bluegrass State.

“I’ve already met with one of the lobbyists from the PGA,” McGarvey said. “It’s good to get their opinions, it’s good to get their thoughts on this because they have dealt with it in other states and in other countries.”

The group plans on pre-filing a bill before the start of the 2019 legislative session, which starts Jan. 8. However, McGarvey said there is no benefit to pre-filing a bill and once a bill is filed, no changes can be made unless it’s called to a committee floor.

“I wouldn’t want to pre-file this bill until or unless its 100 percent certain. Pre-filing give a bill gives it no special significance whatsoever. When you pre-file, you are trying to get a story, draw attention to it. We don’t need to do that with this bill — everyone is already looking at it.”

Who could regulate sports betting in KY

Representative Dennis Keene filed BR-15 on Sept. 7, which would require the Kentucky Lottery Corporation (KLC) to institute a sports wagering system.

Since the KLC would be regulating the system, a constitutional amendment would not be needed. All games created and regulated under the umbrella of the lottery are legal in Kentucky.

A major hurdle for lawmakers to overcome will be which regulatory body would be in charge of sports betting.

Both the Kentucky Lottery Corporation and Kentucky Horse Racing Commission have been viewed as possibilities. Committee members have also floated the idea of developing a new independent regulatory body to oversee sports betting.

When asked if sports betting would take money away from education, which is funded by the state lottery, Delacenserie said it probably could.

Representative Jason Nemes said when it comes to deciding who will regulate sports betting, the committee is not interested in introducing monopolies.

“We want to make sure we protect horse racing and make sure we protect the lottery,” Nemes said. “An independent agency to regulate sports betting will ensure it’s as protected as it can be.”

Sports betting in 2019

Considering only a handful of states legalized sports betting following the landmark May 14 decision, professional sports leagues may begin to deploy a number of lobbyists in states where legislation could be introduced. Of the states that legalized sports betting in 2018, none included an integrity fee.

While there is no integrity fee in Keene’s bill, BR-15, or any bills filed from last year’s session, it’s uncertain if lawmakers will revisit.

Legislative hearings to discuss sports betting will take place in Illinois, Indiana and DC next week.

Next steps in the Bluegrass State

McGarvey said leagues don’t have an anchor to the state other than their fan bases.

“One thing that makes sports betting unique here is that we don’t have any professional sports teams,” McGarvey said. “When the leagues come calling on us, we are willing to meet with them, we want to hear what they have to say.”

McGarvey said lawmakers can look at other states and come up with best practices. But any bill passed needs to be a benefit to the residents of Kentucky.

“My goal is pretty simple: the Supreme Court made this legal, (so) let’s not have Kentucky the last state to do something,” McGarvey said.

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.