A flurry of 11 divergent amendments to a Kentucky sports betting bill was proposed on the House floor on Tuesday, surprising even the legislation’s author.
The amendments could take the bill in a number of unanticipated directions, including:
- Substantially raise taxes and fees for sports betting, online poker and daily fantasy sports.
- Give local governments the option of opting out of the new gambling activities.
- Open sports wagering up to many lottery retailers and restaurants in the state.
The amendments are indicative of the divide on a bill that has languished in the House since passing in committee nearly a month ago.
Rep. Adam Koenig, the sponsor of H 137, tells Legal Sports Report that the three lawmakers offering the amendments didn’t give him the courtesy of letting him know in advance of their filings. He suggested that they are trying to sabotage the bill and wouldn’t vote for it even if the amendments were adopted.
“I don’t believe their heart is in the right place, shall we say,” Koenig said. “Most of the people who filed those amendments would get rid of the lottery and horse racing if they could. I will try to get them defeated on the floor, and if the bill comes up for a vote then I probably have the votes to defeat all the amendments.”
Lawmaker trying to raise Kentucky sports betting tax
Rep. Jason Petrie offered eight of the 11 amendments filed Tuesday. Three of the amendments provide options to make tax rates worse, worser and worsest.
As written, the Kentucky sports betting bill sets tax rates at:
- 6% for fantasy sports
- 6.75% for online poker
- 9.75% for retail sports betting
- 14.25% on mobile sports wagers
Petrie’s three progressively worse options:
- 9% fantasy sports, 10% online poker, 14% retail sports betting, 21% mobile sports wagers.
- 12% fantasy sports, 13.5% online poker, 19.5% retail sports betting, 28.5% mobile wagers.
- 18% fantasy sports, 20.25% online poker, 29.25% retail sports betting, 42.25% mobile wagers.
Basically, he wants to raise the rates by 50%, double or triple. Petrie chairs the House Judiciary Committee.
Koenig’s response to raising the tax rates:
“With the tax rates, these are folks concerned that it’s going to make people broke and hurt families. If they raise the taxes, then all the house is going to do is take a bigger chunk and pay less back to the bettor, and people will go broke faster that way. So I don’t think it’s a good-faith effort to improve it, assuming they understand the effects of what they’re suggesting.”
Local opt-out proposed in Kentucky
Petrie also backed an effort to allow local governments to prohibit fantasy contests, online poker or sports betting in Kentucky.
The amendment specifies that a jurisdiction may, by local ordinance, prohibit any of the gambling expansions within its applicable area.
If a municipality does opt-out from KY sports betting, geolocation software used in online sports betting platforms would be required to enforce the prohibition. That could make offering mobile sports wagering in Kentucky more complicated.
“I don’t think that’s a great amendment, but I don’t suppose it would be the end of the world,” Koenig said. “I think that’s just dangerous policy in general, but it’s fine. It is what it is. If it gets on there, it’s still better than having nothing.”
Amendment seeks to add lottery participation
Rep. Richard Heath, who chairs the House Committee on Agriculture, wants to expand, by thousands, the locations where retail Kentucky sports betting is permitted.
The bill in its current form would limit physical sports betting to seven licenses, six for horse racetracks and one for the Kentucky Speedway.
Heath proposes to add all lottery retailers in good standing with the Lottery Corporation, as well as restaurants at which 70% of the food and drink sales come from food, or any other secure location deemed appropriate by the commission.
There are more than 3,200 lottery retailers in the state of Kentucky. The restaurant clause seems to refer to an additional 400 bars and restaurants the Kentucky Lottery allows to offer keno.
The amendment seems at odds with the current climate in the legislature for gambling expansion.
“I don’t understand that from someone who is adamantly against gambling to allow it to be everywhere all the time,” Koenig said. “I might understand it better if the sponsor talked to me about it. It seems like that’s just a shot at our horse racing industry that creates 80,000 jobs and is the signature of our state.”
Kentucky conservatives push back on sports betting
Gov. Andy Beshear came out strongly for the gambling expansion bill in his State of the State address last month and doubled down last week in a joint press conference with Koenig.
The message from the Democratic governor isn’t resonating with the legislature, which is controlled by a supermajority of Republicans.
There are also reports of a divide within the state’s Republican caucus, with Christian conservatives opposing the bill for religious reasons. Koenig lamented that the Family Foundation of Kentucky is influencing a lot of his colleagues on the issue.
“Gambling is not the answer,” Rep. Chris Fugate said last week. “If you think about when we depend on the people of our districts to lose money so the state can gain money, it’s not biblical first of all. It’s against the bible. It’s morally wrong.”
Sports betting’s difficult road in KY House
Before moving the bill through his Committee on Licensing, Occupations and Administrative Regulations, Koenig indicated that he thought the bill would move quickly through the House and then face a more difficult path in the Senate. Now he realizes he was wrong.
“I never thought I’d say this, but I think the Senate will be easier than the House,” Koenig said.
The bill has stalled in the House, while the votes appear to be there in the Senate, where Sen. Majority Leader Damon Thayer is in full support.
“I think we’ve got the votes to pass it if it gets here anytime soon,” Thayer said last week.
Koenig admitted that he probably made an error moving the bill from committee before locking up support, allowing time on the House floor for opponents to play shenanigans with amendments.
H 137 has 38 sponsors or co-sponsors and needs 51 votes to pass in the House. There’s still two months left in the Kentucky session to move the legislation.
“The fact of the matter is everyone against it is a friend to the bookies and a friend to the offshore sites,” Koenig said.