Since the surprise passage of online gaming and poker legislation in the state of Michigan to close 2019, there has been a great deal of talk regarding who might be next to broach the expansion of gaming. There are some usual suspects in the mix, including California (for the umpteenth year in a row) and even Illinois. But would you believe that the Commonwealth of Kentucky currently has the inside track?

2019 Elections Bring Changes

Prior to the 2019 off term (neither midterm, for Representatives to the U. S. House of Representatives, nor Presidential) elections, in which Kentuckians headed to the polls to choose who they wanted for governor, the attitude regarding any expansion of gaming in the state was not favorable. Governor Matt Bevin, while saying he was “agnostic” on the subject, lamented the supposed impact on families in saying “somebody takes their life in a casino because they’ve wasted the last semblance of dignity and hope they had” during the campaign. Bevin’s opponent in the 2018 election, Attorney General Andy Beshear, had a different look.

Beshear, in campaigning for the office, issued a directive that he was ready to look for expansion of gaming to counter deficits in the state’s pension system. “Indiana and neighboring states continue to steal our revenue,” Beshear stated when the subject was broached. “I’ll always put the best interests of our people first – and that includes expanding gaming to create new opportunities here in Kentucky.”

The people of Kentucky spoke in November, albeit by a very slim margin. Once the votes were counted, Beshear was able to defeat the incumbent Bevin by slightly more than 5000 votes. After initially stating that he was challenging the results, a chagrined Bevin accepted the results and Beshear took the Governor’s seat in December.

New Governor, New Legislation

Once Beshear was inaugurated, new legislation headed to the Kentucky General Assembly. In December, legislation was introduced to open the state’s thoroughbred racetracks for sports betting with an online component. Any racetrack in the state, plus any pro sports venue that seats up to 50,000 people, would be eligible to operate a sports book. These outlets would also be able to offer online wagering opportunities. Taxation on the operations would be 14.25% on online bets, with live operations only being taxed at 9.75%.

There was a roadblock to these initial offerings, however. Betting on Kentucky collegiate teams, especially the powerhouse University of Louisville and the University of Kentucky, was initially banned because of the perceived possibility of affecting outcomes of their games (of course, this was across the board for all collegiate Kentucky teams). Through negotiation, however, the parties involved were able to come to a consensus that would allow for the state’s collegiate sporting contests to be wagered on.

The Kentucky House Committee on Licensing, Occupations and Administrative Regulations unanimously approved House Bill 137 on Wednesday, but there’s still a great deal of work that needs to be done. State Representative Adam Koenig has proposed in the past a more widespread expansion of gaming, one that included online poker and daily fantasy sports (DFS), but there hasn’t been the support from the more rural portions of the state. For sports betting, however, Koenig has gotten support, particularly because “a lot of other states jumped on the bandwagon,” Koenig said.

It is estimated that the new betting revenues will be bringing in around $22 million per year. That money would be earmarked for Kentucky’s pension system, gambling addiction services and regulatory oversight of the industry. If it is successful, it is possible that, with the more receptive audience for gaming expansion in the Bluegrass State, that DFS and potentially online poker and/or casino gaming could be proposed next.

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