Kentucky lawmakers may be torn when it comes to gray machines in the state, but when it comes to sports betting the House Committee on Licensing, Occupations, and Administrative Regulations was unanimous in its support of the bill. It moves to the House floor where a vote is expected early next week.
Bill sponsors Rep. Michael Meredith and Rep. Al Gentry presented the bill, HB551, which would allow the nine state racetracks to contract with operators to allow retail and online sports betting in the state. While the initial draft of the bill introduced to the legislature included an in-person registration requirement for the first 12 months of operation, Meredith offered a substitute that removed that piece from the legislation.
Bill sponsor admits Kentucky sports betting will not pad state coffers
“I think if you look at what the national model is showing us right now, everybody has moved away from in-person registration. It’s not necessary with the technology that we have today. And it would have been a competitive disadvantage in our program. It would have been harder to bring people from the illegal marketplace into the legal marketplace if they actually had to go to an in-person facility to register those accounts,” Meredith explained after the hearing.
The tax on the bill would be 9.75% for retail betting and 14.25% for online betting. Operaors would pay an up-front licensing fee of $500,000, while platform providers would pay a fee of $50,000. Meredith told his fellow representatives very clearly that this is not a bill that will bring a ton of revenue to the state. He estimated between $23-$24 million of tax revenue annually. That money would go to pay for the regulation of sports betting in the state, with any leftover money going into the state pension fund.
Meredith believes he has the votes in the House
After the hearing, Meredith said he was confident he had enough votes to meet the 60-vote threshold in the House. He also expressed optimism about the Senate.
Last year, efforts to legalize sports betting in the state stalled when legislation sponsored by Rep. Adam Koenig could not get to the floor in the Senate for a vote because of an unofficial GOP policy that bills without majority support in the Republican caucus would not get called for a vote. Meredith addressed that issue in his comments today.
“I think we’re really, really close. I think we’re within a couple of votes of being where we need to be and we’re going to continue to work those as we get the bill off the House floor,” he said. “I feel confident that we have enough votes to get through the Senate caucus issue as far as having half of their caucus. And we’ve just got the higher threshold that we’ve got to meet over there. And so I feel pretty confident about that. But we’re excited. We’re probably within about one or two of being where we need to.”
Meredith was asked about the lack of responsible gambling measures within the legislation and he noted that was by design and something he intends to address in future sessions.
“Chairman [Matthew] Koch and I have committed to come back next year with something and a comprehensive look at that piece. We don’t think that sports wagering should have to bear the full cost of a problem gaming fund. We think that it should be spread out across the industry as a whole instead,” he explained.
The impact of gray machine legislation on sports betting
While sports betting certainly has moral objections from certain lawmakers, it pales in comparison to the controversy surrounding an effort to ban gray machines in the state. That measure was tabled in the House last week after clearing committee.
When asked about how much the fate of sports betting is tied to the outcome over gray machines, Meredith said he has been doing his best to keep the issues separate even though they are both gambling measures. He did, however, note that the gray machines are more of a predatory gambling issue in his mind than sports betting.
“The sports wagering industry came to Kentucky and asked to be legalized. The gray machine industry came to Kentucky before they were legalized and put machines all over the state. And if you want to talk about predatory gaming, they’re much more predatory than what the sports wagering marketplace is,” he said.