LEXINGTON, Ky. — Mark Twain might or might not have famously said he wanted to be in Kentucky when the world ends. Everything happens 20 years later here.
In the case of legalized sports betting, better late than never.
In an upset last week, the Kentucky General Assembly passed HB 551, legalizing sports betting in our fair commonwealth. We will soon be the 37th state in which citizens can wager on a sporting event — other than horse racing — since the 2018 U.S. Supreme Court decision paved the way for states to join Nevada in doing so.
First of all, the bill rights a hypocritical wrong. How was it OK to place a bet on a horse race in Kentucky but not a college or professional football game? How was it legal to play the “historical racing” machines at gaming halls but not wager on a basketball game?
It also rights a monetary wrong. With Ohio opening sportsbooks in January, six of Kentucky’s seven border states have legal sports betting. With Tennessee, Illinois, Indiana, Virginia, Ohio and West Virginia open for sports bets, Missouri remains the holdout.
Plus, it was not as if our fair citizens lacked the desire to place bets on sports. The American Gambling Association reported that over the first weekend of the NCAA Men’s Basketball Tournament, GeoComply found 295,000 blocked attempts at accessing online sports books by Kentuckians.
“I was at a sportsbook in Southern Indiana for the first weekend of the NCAA Tournament. The parking lots were filled with vehicles with Kentucky license plates,” said Brad Taylor, who hosts a daily sports gambling show on WLXG Radio. “We know the Big Blue Nation is everywhere. But the fact that they had to drive over the state line just to put a couple of dollars on their beloved Wildcats, while Indiana residents could relax at home and wager from their cell phones, simply didn’t make sense.”
Those out-of-state wagers by Kentuckians willing to cross the border handed tax money to our neighbors. The Ohio Casino Control Commission reported that $638.8 million was bet in February, down $208 million from the opening month. Still, operators reported $82 million in revenue. With a 10 percent tax on that revenue, Ohio received $8.3 million.
Reports say once the infrastructure is up and running, Kentucky could expect up to $23 million in annual tax revenue. Retail sports bets will be taxed at 14.25%. Online bets will be taxed at 9.75%.
“I’m not sure what the tax revenue will be. The $22-23 million was from an older study, IIRC, and a lot has changed in the industry since then,” said Steve Bittenbender, senior writer for Casino.org. “But raising revenue shouldn’t be the only factor in legalizing something that millions of people can already do in their states.”
In-person retail bets must be placed at any of the nine horse racing tracks and their casino-style venues. Each track will be allowed to partner with up to three online vendors such as FanDuel, Draft Kings and BetMGM. Judging by the numbers from other states, at least 80% of the bets are likely to be placed through the apps.
When might this start? The effective date is 90 days after the legislative session. After that, the Kentucky Horse Racing Commission has up to six months to issue regulations. The smart play would be to have everything in place for the start of the college football season.
“The sportsbooks will do their very best to be up and running before Labor Day weekend,” Taylor said. “They don’t want to miss one weekend of football profits they can make, especially off the new customers who will get huge bonuses to sign up.”
Is there a risk to this? Of course. Like wagering on Thoroughbreds, sports gambling can be addictive. Included in HB 551 — signed by Gov. Andy Beshear on Friday — is a 2.5% tax to fund gambling support efforts.
Just as with horse racing, no one is forcing Kentuckians to bet, however. It’s a choice. And it’s soon a choice Kentuckians can make for themselves. If they choose to do so, our state can reap the monetary benefits. Better late than never.