30-second summary:
- House Bill 175 has been approved by the House Licensing, Occupations and Administrative Regulations Committee
- If approved, sports betting is estimated to bring a minimum of $20m (€17.6m) in new taxes to the state
- Most of the money generated would go towards the public pension system, which has a large shortfall
- Passage uncertain as the bill needs 60 out of 100 votes in the full House to pass
Sports betting in Kentucky is one step closer to becoming a reality. However, there is still a long way to go before it becomes legal. House Bill 175 recently passed through the House Licensing, Occupations and Administrative Regulations Committee.
The bill must now make it through the full House of Representatives. At least 60 of the 100 members must be in approval of the bill.
Tough road ahead
House Bill 175 has a tough road ahead. If passed into law, the bill would allow for sports betting at approved locations. This would include state-licensed horse racetracks and the Kentucky Speedway. It would also allow wagering via an app. However, patrons would have to sign up at an approved location before being allowed to bet online.
The bill would also legalize online poker and fantasy sports.
The bill must now be approved by the full House of Representatives, by a total of 60 votes out of 100. In the Kentucky House, Republicans control 61 of the seats. A number of republicans are reportedly opposed to the bill, which may cause an issue with passage. Some individuals are morally opposed to gambling in general.
Representative Adam Koenig said: “I don’t know how it’s going to. Right now we have to work on talking to other members. I think we’ve got a pretty good chance of getting it passed if everyone votes their conscience.
“There’s a lot of folks in my party who believe in freedom, and there’s a lot of folks on the Democrats’ side who ran on finding (pension) funding first.”
Revenue allocation
If Kentucky is able to legalize sports betting ahead of neighboring states, it estimates up to $48m (€42.2m) a year in taxes. This figure would drop considerably if other states launch sports betting, to around $20m (€17.6m).
These estimates mean many lawmakers are ready to act now because of where the revenues could be spent.
Income from sports betting would be divided several ways. Some would be earmarked for regulation of the new industry. Some would fund a program to help problem gamblers.
However, most of the funds would go to the public pension system. Right now, the pension pot has a major shortfall. A minimum of $39bn (€34.3bn) is needed to pay benefits for the next 30 years.
As the bill stands now, sportsbooks would pay 9.75% in taxes on revenues. This does not include the money that is paid to players who win. For online sports betting, the tax rate is set at 14.25%.