Kentucky Sports-Betting Market Exceeding Expectations

December 12, 2023
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Regulators have disclosed handle and tax figures showing Kentucky is already ahead of revenue projections after the first two and a half months of legal sports betting in the Bluegrass State.
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Regulators have disclosed handle and tax figures showing Kentucky is already ahead of revenue projections after the first two and a half months of legal sports betting in the Bluegrass State.

The Kentucky Horse Racing Commission's (KHRC) sports-betting director Hans Stokke told commissioners on Monday (December 11) that total handle was $45.8m, generating $312,965 in taxes for the first few weeks following the launch in September.

Sports betting launched on September 7 with the opening of nine retail sportsbooks, with mobile wagering going live on September 28.

The total handle was $294.95m in October, generating $7.61m in tax revenue. Total year-to-date tax collected has amounted to more than $7.94m, Stokke said.

Governor Andy Beshear, a Democrat, has said since he signed House Bill 551 in March that sports betting should generate about $23m a year in tax revenue but anticipates that figure will increase over time. Retail betting revenue is taxed at 9.75 percent, while mobile wagers are taxed at 14.25 percent.

That tax money primarily goes to cover the state’s public pension shortfall, with some funding earmarked to the KHRC, which regulates sports betting in the state.

Stokke said preliminary numbers for November show this trend continuing with $260m in handle, $73m during the Thanksgiving holiday. The numbers for December will also include handle and tax revenue from Derby City Downs, which opened last week in downtown Louisville.

He added that Kentucky sports-betting financial reports will soon be made available every month. The first such report was published later on Monday.

The KHRC also unanimously approved several additions to its sports wagering catalog, as well as renewing nine sports-betting licenses. Stokke said each potential addition needs a separate application.

Additions to the catalog include Athletes Unlimited (basketball, lacrosse, softball, volleyball), NCAA Volleyball, UFC Contender Series, TGL or Tomorrows Golf League, and esports entry H2H Global Gaming League SIS NBA 2K Basketball.

“Each esports contest needs to be added to the catalog so that they may accept wagers on those,” Stokke said.

Stokke said regulators have proposed the removal of the International Champions Cup, an annual women’s soccer invitational tournament that was canceled in 2023 and not rescheduled. 

The esports catalog entry for Counterstrike Global Offensive (CS: GO) has been renamed as Counterstrike 2 (CS2) and will be reflected in the catalog as such. 

Prior to the commission approving the new additions, Stokke made it clear that a licensee “shall not offer sports wagering that has not been approved by the racing commission.”

The commission also approved one-year license renewals for nine sports-betting operators. The licensees are Caesars Sportsbook, FanDuel, BetMGM, Circa Sports, DraftKings, Fanatics Betting & Gaming, bet365, ESPN BET and Kambi.

Operators are required to pay an initial fee of $50,000 and an annual renewal fee of $10,000 to the commission.

Stokke explained that each company was issued a temporary license on August 22, and all have requested a renewal of their sports wagering service provider license.

“Pursuant to [Kentucky gaming law], initial applications completed for sports wagering conducted in 2023 may also serve as the renewal application for sports wagering conducted in 2023,” Stokke said. “As of the deadline, no additional companies have submitted service provider applications for conducting sports wagering activities in Kentucky.”

The initial license fee for each racetrack is $500,000, with a $50,000 annual renewal fee, with brick-and-mortar sportsbooks operating at racetracks and historical horseracing facilities. 

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