Legislators again push for sports betting legalization. Here’s what to know.
A bipartisan group of Kentucky House members is once again making a push to legalize sports betting in Kentucky. And this time they have other gambling priorities as well.
Rep. Adam Koenig, R-Erlanger, announced his intent Monday to file legislation that would not only legalize sports betting, but also reform the state’s parimutuel betting laws, outlaw so-called “gray machines” and create a trust fund to deal with issues of “problem gaming” across the state.
Copies of the bills were not provided by press time. Each will be filed separately, along with an omnibus bill that will roll all four into one piece of legislation.
Koenig is no stranger to the push to legalize sports betting in Kentucky. In the last three years, he filed bills with that intention — last year, the bill didn’t get assigned to committee. Kentucky is one of 17 states in the country that hasn’t legalized betting on sports contests.
“People like to talk about freedom. Well, this is freedom,” Koenig said. “This is government getting out of the way and allowing adults to make adult decisions.”
In 2019 and 2020, the legislation legalizing sports betting was not able to secure a 38-vote majority of the 75-member House Republican Caucus support and therefore was not brought to a floor vote by House Republican leadership, Koenig said.
“We’ve been close in the past, and I imagine it’ll be close again this year,” he said. “Certainly, the votes are there on the House floor. It’s a matter of getting my fellow Republicans to see the importance of it, the freedom aspect and the need to provide and support and protections for our citizens.”
Koenig said he couldn’t speak to the Senate’s thoughts on the legislation, but “felt comfortable” in prior years with the sports betting legalization bill’s chances in that chamber.
Koenig made reference to a poll by a gambling advocacy group this month that showed that 65% of Kentuckians supported legalizing sports betting. He said also that $2 billion is wagered illegally on sports betting each year — money that would be taxed if it’s made legal in states like Kentucky.
Gov. Andy Beshear previously called on the state legislature to pass the 2020 version of Koenig’s sports wagering legalization bill.
‘Gray machines,’ increased wagering platform tax, and a ‘problem gaming’ trust fund
Rep. Killian Timoney, R-Lexington, is sponsoring legislation that would outlaw certain unregulated gaming machines, also known as “gray machines” or skill games.
A Herald-Leader report from earlier this year found that well over 1,000 “gray machines” across the state are in operation and in many cases, law enforcement groups are getting a cut of the proceeds.
“What the bill is going to say is, if it’s not expressly made legal by the charitable gaming, lottery, by the racing commission, then they’re not legal,” Koenig said. “It’ll be up to the locals to fight them and prosecute them.”
Koenig added that the bill also will direct Kentucky State Police to create a task force to “go after” those machines.
“One message that we are going to say clearly with this bill is that when dealing with Kentucky, asking for forgiveness instead of permission is something that we don’t like from a policy standpoint,” Timoney said. “We want to make sure that we send that message to any industry that wants to come here to have access to our citizens: that they need to follow the process.”
Another bill introduced by Koenig features a “modernization” of parimutuel wagering, raising the tax on advance deposit wagering platforms to 1.5%.
ADWs allow bettors to wager on horse races online through betting accounts. To operate in Kentucky, ADWs are licensed through the Kentucky Horse Racing Commission.
Winnings at the racetracks are taxed at 1.5% while winnings paid through ADWs like TwinSpires, which is owned by Churchill Downs, are taxed at 0.5%.
For fiscal year 2021, more than $450 million was wagered through Kentucky’s ADWs.
The measure is estimated bring in an extra $27 million to the General Fund in two counties, Koenig said.
That bill does not change the tax rate on historical horse racing, a slot-like game that bases winnings on the results of previously run horse races, in Kentucky.
Koenig’s final bill would create a trust fund with $225 million from the state’s settlement with online gambling giant PokerStars in the hopes of addressing Kentuckians’ problems with gambling addiction.
“If managed properly, and I believe it will be, we’ll probably take care of our problem gaming needs for centuries if not in perpetuity ... It’ll probably be the most robust program in America,” Koenig said.
