If at first you don’t succeed….

Kentucky State Representative Adam Koenig is giving his online sports betting bill another go. He was unable to get anywhere with it in 2020, but over the weekend, Koenig introduced HB 241 in the House, where it was subsequently assigned to the Committee on Committees (yes, that’s a real committee).

The bill’s primary aim is to legalize online sports betting, but it would also legalize online poker and daily fantasy sports, as well. With the COVID-19 pandemic shredding state economies, Kentucky is in difficult location, surrounded by five states – Illinois, Indiana, Tennessee, West Virginia, and Virginia – that already have sports betting and two more in Missouri and Ohio that are considering it. This means that Kentuckians have plenty of opportunity to take their betting dollars out of the state.

Plenty of obstacles

It is going to be a tough road to hoe for Koenig, though. For starters, Kentucky is known as very conservative state politically, and though it is obviously known for horse racing, gambling expansion might not sit well with its residents.

The way the legislature works is another significant hurdle. In Kentucky, budget years are even-numbered, and because this bill has to do with revenue growth, it is considered budget-related. In an even-numbered year, such a bill would require just a simply majority of lawmakers to vote in favor. In a non-budget year, however, a revenue bill requires a two-thirds super majority.

The Kentucky legislature also meets for just 30 days in odd-numbered years, four of which will be used for essentially housekeeping this month. The session ends March 30, which does not give Koenig much time to get his bill moving.

Historical horse racing machines

On top of all that, there is the issue of “historical horse racing” (HHR), which is likely going to be a higher priority and thus push Koenig’s bill down the list.

HHR machines look like slot machines, but the results are actually based on past horse races. There is no way for a player to identify the race, so nobody could look up results in a sports almanac and make a fortune. The end result is a slots-looking machine with spinning reels, but rather than a random number generator determining the outcome, an old race does. Sometimes video of the race is presented alongside the reels.

HHR machines can be found at racetracks and off-track betting locations. In the last fiscal year, they took in $2.2 billion in bets and generated $190 million in revenue. But recently, the Kentucky Supreme Court said the machines made by Exacta Systems don’t meet the pari-mutuel betting definition and are thus illegal.

As mentioned, this could be a problem for Koenig – who supports HHR machines – because horse racing dollars and jobs are very important to the state. The legal problems with the Exacta machines may need to be remedied with legislation, and if so, sports betting, poker, and fantasy sports will have to take a back seat. With limited time on Kentucky’s goofy legislative calendar, it is possible that Koenig will have to wait yet another year for his bill.

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