UPDATE: Kentucky Governor Signs Sports-Betting Into Law

March 31, 2023
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Governor Andy Beshear signed a bill Friday to legalize sports betting in Kentucky, putting his signature on House Bill 551 less than a day after the Senate approved the measure on the final day of the 2023 legislative session.

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Editor’s note: This story was updated on March 31 at 1p.m. EST to reflect that Kentucky’s governor has signed sports betting into law.

Governor Andy Beshear signed a bill Friday (March 31) to legalize sports betting in Kentucky, putting his signature on House Bill 551 less than a day after the Senate approved the measure on the final day of the 2023 legislative session.

The newly enacted law enables the state’s nine racetracks to open retail sportsbooks and partner with mobile wagering operators.

“For years I’ve believed it was time for Kentucky to join so many other states and pass sports betting,” Beshear told reporters, legislators and industry executives at a news conference. “Virtually every other state around us, whether they be Democratic or Republican-led, have passed it.”

Beshear said state officials like to talk about having a competitive business environment in Kentucky but that was not the case when it came to embracing the legal sports wagering industry.

“Now after years of urging action, sports betting is finally going top be legal in Kentucky. We made it happen,” the Democratic governor said.

The Senate passed HB 551 by a vote of 25-12 on Thursday, with all seven Democrats joining with Republicans to get the measure over the 23 votes, or 60 percent, threshold required to pass. Earlier this month, the House of Representatives passed the bill by a vote of 63-34.

Kentucky now becomes the 37th state in the country to legalize sports betting since the U.S. Supreme Court overturned the federal ban in May 2018.

“This has been a labor of love,” Republican Representative Michael Meredith, the bill’s primary sponsor, said during Friday’s news conference. “It has been a lot of work over the last three to four months.”

Meredith recognized former state Republican Representative Adam Koenig for his long-time efforts on this issue, saying he “taught me everything I needed to know about this bill as we moved forward.”

He added that it also took Republican and Democratic leadership in both chambers of the General Assembly to get the bill passed on the last day of the session.

During floor debate in the Senate on Thursday, Republican Majority Floor Leader Senator Damon Thayer reminded his colleagues that Kentucky was a sports crazy state, and “people want to make the choice on their own (whether) to make a wager on a sports event like almost all surrounding states.”

In explaining her yes vote, Senator Karen Berg, a Democrat, said she was not elected to be the morality police.

“I don’t think I was elected to be the person that has the power to tell my constituents what they can and can’t do with their own money, with their own bodies, with their own thought processes and with their own minds, as long as they are not hurting anybody else,” Berg said.

Berg noted that there was a provision in the bill to set aside 2.5 percent of annual tax revenue to create a new fund to help people who develop a gambling problem. It is expected that legal sports betting would generate about $23m in annual tax revenue for Kentucky.

“I’m proud to be opposed to gambling,” said Republican Senator Gary Boswell. “I voted against gambling on the grey machines. My constituents, however, are split on this issue. And I think this bill has [the] support to pass. That’s democracy.”

The act goes into effect 90 days after the end of the session, which is July 29. The Kentucky Horse Racing Commission (KHRC) would then have six months to develop and approve rules regulating sports betting in the state.

The state’s nine racetracks would be permitted to obtain a license through the commission for retail sportsbooks at the tracks and their offsite venues offering historical horseracing machines (HHR).

The tracks would also be able to partner with up to three online betting operators to offer mobile wagering skins in the state. Retail bets would be taxed at 9.75 percent, while mobile wagers would be taxed at 14.25 percent, mirroring the equivalent tax rates already in place in New Jersey.

Republican Senator Jimmy Higdon, who voted against HB 551, said he made a promise to his constituents when he ran for Senate in 2009 that the only way he would vote for gambling would be through a constitutional amendment requiring a voter referendum.

“Kentucky’s constitution only allows three types of gambling: lottery, charitable gaming, pari-mutuel [wagering], and this does not fit in any of those categories,” Higdon said.

Senator Gex Williams, a Republican, voted in favor of HB 551 but made it clear that he does not like sports betting.

“This is a moral issue,” Williams said. “I can’t take responsibility for everybody in this state on their wagering. However, what I assure them is … there is a fund here for problem gamblers. And that we would monitor that to make sure it is sufficient for that we need to do, and that it’s going to the right people.”

“So I vote [yes], and I will be watching,” he added. “I think this body will be watching to make sure people whose families are hurting from this will be taken care of and there’ll be some mitigation in the future.”

Efforts to legalize sports betting in Kentucky have fallen short over the last five years, including during the 2022 legislative session. Meredith did not include language in the bill that passed legalizing daily fantasy sports and online poker, two issues that kept the measure from being passed previously.

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