-
Casinos for you
Kentucky Temporarily Okays Retail & Online Betting Ahead of Sept Debut
By Jeff Osienya Aug 26, 2023 IndustryThe Bluegrass State has moved to expedite its entry into regulated online and mobile sports betting by awarding temporary licenses. Here’s a closer look at the new developments that come just in time for the NFL season kick-off.As the state of Kentucky gears up for the official launch of retail sports betting on September 7 and online sports betting on September 28, the Kentucky Horse Racing Commission has approved temporary licenses to sportsbooks and service providers. Eight online operators and seven racetracks also received the temporary permits to begin operations on Tuesday, 16 days before the D-day. This approval was awarded during a meeting where KHRC commissioners anonymously voted for the operators.
The decision to grant the sports wagering licenses to select operators ahead of the scheduled time comes a few months after Governor Andy Beshear signed House Bill 551 into law. Sports betting was thus legalized, effectively kick-starting a process to develop guidelines for the new market. As the legalities of sports betting in the state are still being reviewed, the KHRC will be releasing a catalog of all qualifying events and types of betting markets before operations begin on September 7.
Several Bigwig Operators Granted Temporary Licenses
The licenses are valid for one year as the state continues to figure out how things will play out once implementation starts. Applications for the requests were received early on in the month, and seven brands who applied were all approved and awarded the temporary license to begin operations as service providers. They include BetMGM, Caesars, FanDuel, Bet365, Circa, DraftKings, Penn Sports Interactive, and lastly, Fanatics Sportsbook, which was not among the initial applicants.
Given that online sports betting operators would need to partner with approved local land-based betting operators to qualify for licenses, seven Kentucky racetracks also got approved for permits. Three of the seven facilities will be opening soon, namely Derby City Gaming in Louisville, Ellis Park in Owensboro, and Sandy’s Gaming and Racing in Ashland. On the other hand, Newport Racing and Gaming, Oak Grove Gaming and Racing in Oak Grove, The Red Mile, and Turfway Park have already served the community for a couple of years.
Further, online operators have already announced partnerships with racetracks and in-person betting facilities. For example, BetMGM and Bet365 will provide online sports betting services in collaboration with Sandy’s Gaming and Racing, whereas Caesar’s will collaborate with The Red Mile. Other alliances formed in this arrangement are between Belfair and Turfway Park, DraftKings and Cumberland Run, Fanatics Sportsbook with Pak Grove Racing and Gaming, BetMGM and Revolutionary Gaming, and Penn Sports Interactive with Ellis Park.
The partnerships give the operators access to the market, which will now be shared between retail and online sports betting. Millions of dollars are set to be spent on renovating some of the venues and setting up new facilities following some of the partnerships. BetMGM CEO Adam Greenblatt pointed out that:
Quote“Kentucky has a rich history in sports and a passionate fan base. Revolutionary Racing is an ideal partner, enabling us to deliver an entertaining and responsible gaming experience while investing in the state through job creation and tax revenue.”
NFL 2023-24 Season: A Motivating Factor in Launch
As the state readies for its first month of sports betting, it has become clear that the move to have the sportsbooks operating ASAP is the NFL Season, which opens on September 7. When the governor released the news of the advance approval of the licenses, he commended the Commission for acting quickly to ensure that sports betting operations would be ready when the season began.
Governor Andy Beshear noted:
Quote“The countdown continues as we move closer to sports wagering with retail locations opening in just 16 days. Thank you to the KHRC commissioners for their dedication to getting this done right and getting it done in time for the opening of the NFL season.”
KHRC Chairman Jonathan Rabinowitz also expressed the Commission’s excitement about the launch, prioritizing player protection and wagering integrity. Rabinowitz said:
Quote“We are excited to open sports wagering on our target date as we continue working through this careful process dedicated to wagering integrity and protecting bettors in the state of Kentucky.”
Sports Wagering Set to Increase Kentucky YoY Tax Revenue
As soon as HB 551 was established as law, it was clear that the state would receive more income as soon as implementation began. Sports wagering has boosted income sources for several states that have moved to pass sports betting bills, and according to analysts, the Bluegrass State will be a significant beneficiary of this big move.
For starters, there is estimated to be a $23 million revenue rise within a year of launching. The income from sports betting will be allocated to sports wagering regulatory authorities, problem gambling under the Cabinet for Health and Family Services, and the Kentucky Permanent Pension Fund.
Racetracks will be required to pay $500,000 for a license and could partner with up to three online operators who will pay a $50,000 fee. This sports betting income is meant to be collected from a 9.75% excise tax imposed on all retail sports wagering venues and 14.25% from online sports wagers.
A Defining Moment Coming Next Month
Implementing sports betting for the first time requires quite a lot of planning, and it appears that Kentucky is hitting the nail on a couple of basics. This includes establishing a new Sports Wagering Advisory Council that would advise the Commission on all matters of sports betting.
On the other hand, while this will definitely benefit the community at large, the two state tribes, the Southern Cherokee Nation of Kentucky and the Ridgetop Shawnee Tribe of Indians, have not been factored into the license-issuing process. That’s because the US Department of Interior does not officially recognize them and, therefore, they don’t qualify to sign gaming compacts with the state under the 1988 Indian Gaming Regulatory Act.
Sports betting has been an economic pillar for several tribes across the country, but the dynamics are different for Kentucky. Moving forward, this is a market that will be of much interest to sports betting fans nationwide.
You might also like