Kentucky lawmakers are hoping that the third time’s the charm and that a bill to allow online poker and sports betting in KY will finally win passage in 2022.
While the bill in question, HB 606, passed the state House of Representatives by a 58-30 vote on March 18, time is running out for it to gain approval in the Senate. The Kentucky General Assembly adjourns sine die on April 14, and only seven regular session days — including Wednesday, March 23 — remain on the calendar.
The bill’s sponsor, Rep. Adam Koenig (R-Erlanger), told lawmakers that the state estimates sports betting alone would net $22.5 million in annual tax revenue. “Given how many states have exceeded their projections, I think $22.5 million is probably a minimum,” Koenig said, according to the Owensboro Times.
How much the state would get in tax revenue from legal, regulated online poker is unclear, but HB 606 in its current form would levy a monthly gaming fee of 6.75% of net poker revenue. Kentucky’s population of 4.5 million is roughly equal to the combined populations of Connecticut (3.6 million) and Delaware (990k) — two states that have legal poker, but no private operators currently offering it to customers.
Under HB 606 in its current form, poker operators would pay an initial licensing fee of $250,000 and annual renewals would cost $10,000.
If online poker and sports betting become legal in Kentucky, they will likely be offered through the state’s seven horse racetracks. HB 606 would allow each track to have one skin for sports betting, but they could also open up to two retail sportsbooks off-site within a 60-mile radius of the track. The additional retail facilities would not be allowed on property adjacent to the track.
The bill also stipulates that any retail sportsbooks within the 60-mile zone of another track would need written approval from the affected track before being allowed to operate. Sportsbook operators would pay an initial licensing fee of $500,000, while annual fees would be $50,000. Sports operators would pay a tax rate of 9.75% on adjusted gross revenue from retail wagers.
The House accepted an amendment by Koenig to have sportsbook operators pay a 14.25% tax rate on adjusted gross revenue from mobile and online wagers, but they rejected a separate amendment by Rep. Josh Calloway (R-Irvington) to limit customer losses for fantasy sports contests, online poker, and sports wagering to $1,000 within a 24-hour period.
House lawmakers in Kentucky tried during the two previous legislative sessions to pass a bill to legalize online poker and sports betting, but failed both times. To date, the Senate has never taken up legislation to legalize online poker and sports wagering.
Bill to Fund Problem Gambling Efforts Also Advances
Meanwhile, a separate bill that would use some of the $300 million settlement that Kentucky received from Flutter also advanced to the Senate.
HB 609, introduced by Koenig and Rep. Al Gentry (D-Louisville), calls for establishing a five-member Kentucky Problem Gambling Assistance Board. The board would be tasked with administering $50 million in funding for the state’s Problem Gambling Assistance Fund.
The bill in its original form called for $225 million to go to the fund, but lawmakers agreed to an amendment by Rep. James Tipton (R-Taylorsville) to trim the amount to $50 million. House lawmakers passed HB 609 by an 81-14 vote on March 21.
“We have many needs in Kentucky,” Tipton told US Gaming Review on Tuesday. “Based on the information presented by the sponsor to me, $50 million should fund the program for 10 to 15 years. In the meantime, the $175 million will stay in our general fund to be appropriated in other areas that will benefit our citizens.”
Last year, Flutter, the parent of PokerStars, settled an 11-year dispute over online gambling that took place in the state from 2006 to 2011. The settlement had its critics, including US gaming law attorneys, who opined that the UK-based gaming giant would have likely won an appeal to the US Supreme Court.
Where Kentucky Lawmakers Stand
Republicans hold supermajorities in both chambers of the Kentucky General Assembly. The GOP has a 75-25 advantage in the House and a 30-8 edge in the Senate.
Nevertheless, both HB 606 and HB 609 drew bipartisan support — 37 Republicans backed the former, while 58 backed the latter. All of the nay votes for both bills were cast by the GOP.
Both bills are currently before the Senate Committee on Committees.
Of the seven remaining regular session days, two are designated as concurrence days to sort out differences between House and Senate versions of bills that have already been passed, but final action on other bills can also be taken. A 10-day period where lawmakers can try to override any vetoes by the governor begins March 31 and ends April 12.
Kentucky Governor Andy Beshear — a Democrat who reportedly favors expanded gaming and is likely to sign both bills, should they reach his desk — could call a special session, but those are usually short.