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Kentucky Takes Another Shot at Sports Betting Regulation, Alongside DFS & Poker
By Jeff Osienya Mar 04, 2022 LegalityKentucky gets back on the horse of sports betting legalization with measures in the House and Senate seeking to okay multiple gambling verticals at a go. Legislators plan to push for retail and online sports betting, fantasy sports, and poker.Adam Koenig, the Kentucky State Rep of District 69, is back. His re-emergence to the limelight of the gaming scene means another stab at legalizing numerous forms of gambling in The Bluegrass State. This time around, Republican Rep. Koenig is going at it again, announcing the filing of House Bill 606, one of four measures tabled in the KY legislature on Monday. Following the introduction of HB 606, Koenig said:
Quote“We’ve been close in the past; I imagine it will be close again this year. Certainly, the votes are there on the House floor. It’s a matter of getting my fellow Republicans to see the freedom aspect of it… [It will be] similar to bills I’ve filed in the past. It will allow for wagering on sports in Kentucky legally, take it away from the bookies and offshore accounts and give people of Kentucky the ability to do what they’d like to do with their own money.”
This being his umpteenth stab at gaming expansion in Kentucky, he has come well prepared. After failing in his attempts in 2019, 2020, and 2021, it appears that the fourth time might be the charm, provided he does a ‘better job of persuading,’ as he said in his Monday briefing. HB 606 is similar to the HB 137 he filed in 2020, with a core objective of regulating retail and online sports wagering alongside DFS and online poker.
Better still, Koenig is also part of 17 state representatives sponsoring Senate Bill 213, introduced by David Yates. Like Koenig’s HB 606, the Senate measure also seeks to regulate retail and online sports betting as well as fantasy sports and online poker.
What Do the Proposed Bills Say?
There’s a lot to divulge about the bill proposed by Koenig and Yates, which bear striking similarities. Without the risk of boring you, we’ll try to steer clear of all the complicated language. First and foremost, the bills propose an age limit to gambling at 18 years old, similar to Wyoming, rather than the 21 years threshold that most states follow.
Age limit aside, you may not necessarily be able to bet on all the sports should the bill come to life. Under the bill, the sports you will be able to wager on are racetrack and professional sports venues. That means anything deemed non-professional such as the local leagues, may not cut it. And of course, besides sports betting, daily fantasy sports and poker are included in the menu.
However, there has been some sort of contention with a clause in the Senate bill. The said clause proposes that residents register in-person to participate in sports betting within the borders of Kentucky. This is rather restrictive as online betting is also planned to be legalized within the state, courtesy of this same bill.
Still, the makers of the bill sought to ease some of the strife they must have anticipated would be caused when they inserted this clause. The restrictive clause requiring in-person registration is planned for repeal from 2024. Additionally, under this bill, all retail brick-and-mortar gambling venues will each be allowed one skin at a time, and locals will be able to download the apps from anywhere in the state.
It’s not all roses and fairytales for the bill, though. The “gray machines” typically spawned across Kentucky will no longer be allowed to operate if this bill sees the light of day. The slot machines currently operate in a non-regulated environment, and as a result, they will effectively be illegal when the bill becomes law.
Let’s Talk Money
As for licensing, an online poker license will cost operators an initial fee of $250,000 plus a $10,000 annual renewal fee. In addition, there will also be a 6.75% monthly taxation on the net revenue collected from poker by operators. Meanwhile, fantasy sports operators will be required to part with a $5,000 licensing levy and an annual renewal fee of $5,000 or 6% of their adjusted gross income.
Finally, for a sports betting license, operators will be faced with half a million dollars $500,000 in licensing charges plus $50,000 in annual renewal fees. On top of that, operators will have to pay a 9.75% tax on their adjusted gross proceeds from bets wagered at tracks or professional sporting arenas. This is a fairly standard tax ratio amidst the trend of the newer markets endorsing enormous takes like the 55% propositioned in Hawaii and New York’s 50% of the GGR. Sports betting operators will also be required to direct 0.5% of their revenue to raise monies for two new funds: the Kentucky Thoroughbred Development Fund (KTDF) and the Kentucky Standardbred Development Fund (KSDF).
The Senate bill also proposes January 15th, 2023, as the date that all licenses applications should have been submitted.
What are the Chances of Success?
There is a more urgent push to expand gambling in Kentucky this year. On top of banking on a better convincing power for the current bills, Koenig disclosed that he would also change tactics. If combining multiple proposals in one comprehensive measure fails to bring results, he plans to try passing as many of the measure’s individual proposals as possible.
Nonetheless, we cannot ignore history as it forms a vital basis for assessing the future. Truth be told, going by the past tries, passing the House and Senate bills may still end up being a tall order. The state legislature has traditionally been known to be against gambling. So, with such an anti-gambling stance, The Bluegrass State risks getting left behind as the sports betting regulation frenzy continues to take over most of the U.S States.
Many states are reaping the benefits of legalizing sports betting, racking up millions in revenue. For instance, in the 2021 calendar year, states with regulated sports betting processed $57.22 billion worth of sports bets, which generated a historic $4.92 billion in revenue.
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