Sports Betting Kentucky
Wondering if the Bluegrass State will legalize online sports betting in Kentucky in 2019? First, you are not the only one scratching your head over the current online sports betting scene in Kentucky, and secondly, this article will outline everything you need to know about online sports betting in Kentucky, as well as sports betting and gambling in general within the Bluegrass State.
So, is online sports betting legal in the state of Kentucky?
Let’s start by noting that Kentucky is one of the moderately conservative states and it could be regarded as one of the most receptive states when it comes to gambling and sports betting. Reason? In the 2016 vote, the state called for the approval of legislation that would allow the construction of land-based casinos. In most cases, the land-based casinos double as sportsbooks. This legislation is yet to be effectuated, but interested parties remain hopeful.
Today, online sports betting Kentucky remains an illegal activity there being no legislation/ laws that have approved online sports betting within the state lines. Even with its rich history that includes the Kentucky Derby and residents in love with the sport, the only acceptable forms of gambling include the pari-mutuel wagering at the horse racing tracks, the state lottery, and online daily fantasy sports.
Does this mean that the residents of the Bluegrass State are completely cut off from the sports betting scene? No. Thanks to some super-savvy legal navigations of the state’s laws, residents can place sports wagers online at sites of offshore bookmakers based outside the US. Unfortunately, the offshore sites are not the best since they aren’t regulated.
The absence of state-regulated online sportsbooks and sports betting sites is a result of the federal law – the Federal Wire Act. Even though the Supreme Court ruled that PASPA (Professional and Amateur Sports Protection Act) that made sports betting illegal under the federal law was unconstitutional, states get to decide whether to legalize sports betting (online/ offline) or not. Then, there is the Federal Wire Act which disapproves of state-licensed and even US-licensed online sports betting activities and operations. Going by the provisions of the Federal Wire act, online sports betting is illegal in the state.
Other than the Wire Act, there is UIGEA, a law that oversees the regulation of all gambling-related activities.
Note, however, that these federal laws, like the Kentucky State laws, don’t criminalize sports betting online, as long as betting takes place with a sportsbook licensed and well-regulated by their governing jurisdiction. The governing jurisdiction should have legalized that form of online gambling for the respective territories. In short, you will not be in violation of federal or state laws should wager on sports online but with an offshore sportsbook. We will repeat one thing though- that the online offshore sportsbooks are not the safest places for you to wager real money at. While the number of offshore online sportsbooks is on the rise, the big sites from Europe and other business hubs do not do business within the United States. So, you will only be dealing with the smaller, lesser-known sportsbooks.
Sports Betting in the Bluegrass State
Even after the Supreme Court repealed the law that made sports betting illegal, PASPA, Kentucky is yet to legalize sports betting within its state lines.
But, things are expected to change with lawmakers coming up with legislation which if approved could make sports betting legal. In June 2018, a nine-member bi-partisan panel made of 3 senators and 6 house representatives was formed to not only study the sports betting legislation but also to draft and file the legislation that would facilitate the legalization process. The legislation’s main focus is on professional sporting events and college sporting events – to a smaller extent. The panel’s other task is the drafting of the regulations that would be necessary for governing sports betting in the state.
Besides the panel, several pieces of legislation have been introduced to legalize sports betting. They include:
The 2017 Sports Betting Bill
This bill (BR 155) sought to legalize sports betting following the speculated repealing of the federal ban on sports betting. It was introduced by Senator Julian Carroll, but it stalled. Should it have passed, BR 155 would have resulted in major amendments to the Kentucky gambling laws, allowing sports wagering in the process. The bill proposed a $250,000 licensing fee for the operators and a 20 percent tax on the sportsbook’s total betting handle. The proposal also included the proposed establishment of the Kentucky Horse Racing Commission to regulate sports betting. One of the reasons for the stalling of the bill is the high tax handle. At 20 percent, the operators would have a hard time running anything close to a profitable sportsbook.
The bill also failed to pass because sports betting was still illegal with PASPA still in effect at the time.
Despite there being legislation when the bill was introduced, it’s terms were regarded as unfavorable to the interested sportsbooks.
House Bill 356 – February 2018
This bill was introduced seeking to legalize wagering on sports (Collegiate and professional for interested customers above 18 years. This bill would have the Kentucky Lottery Corporation oversee the sports betting activities, but it stalled in the committee.
Bill Request 29 – June 2018
The introduction of this bill was aimed at the legalization, the regulation, and the taxation of sports betting in the sports. While it looked very promising, it suffered a huge fatal blow in the form of a repetitive tax mistake which was present in legislation introduced in 2017 – it had a huge tax on the total betting handles. In this bill, there was a 3 percent tax on the betting handle. This handle meant that the 3 percent tax would be applicable on the wagered amount in the Kentucky sportsbooks. The big deal is the sportsbooks only get to keep about 4-5 percent of the total betting handles once they pay winners. So, the 3 percent tax rate on the total betting handle would cripple the sportsbooks operations because they would have to part with at least 50 percent of their revenue.
Bill Request 15 of filed on September 2018
This bill suggested several sensible regulations that would give the Kentucky Lottery Corporation the regulatory oversight needed for running of sports betting in the state. The bill further establishes the minimum age for persons to participate in sports betting to be 18 years. The regulations would also see to it that insiders do not bet on their sports.
This bill did not tackle the taxation aspect of sports betting – which could be seen as a stealth move since issues relating to sports betting and tax would require careful analysis before its dumped on the table. Since the tax rates must be reasonable, the lawmakers are keen on the tax rate they suggest, not to discourage sportsbooks. There is hope for this bill despite the previous unsuccessful appeals in the past.
In October 2018, an hour-long meeting between the members of the Interim Committee on Licensing, Administrative Regulations and Occupations covered several topics ranging from integrity, tax rates, as well as the best regulatory practices. Such discussions show the potential of the legalization of sports betting.
The Future of sports betting
In preparation for the expected 2019 legislative action, several sports betting lobbyists are in Kentucky. And according to Senator Morgan McGarvey, these actions show the seriousness of passing legislation in support of sports betting. Among the lobbyists are 10 representing the NBA, PGA Tour, and the MLB.
Should sports betting become legal in the Bluegrass State, the Kentucky Lottery Commission would be expected to institute a wagering system for sports betting. Then, the lawmakers would have to identify a regulatory body for sports betting. The Kentucky Horse Racing Commission and the Kentucky Lottery Corporation are viewed as the bodies that would be responsible for the regulation of sports betting if sports betting is legalized.
Online Fantasy Sports Betting in Kentucky
The current gambling laws in Kentucky favor Daily fantasy sports (DFS) thanks to the fact that it’s been the most popular sports gambling option from 2006. DFS is also exempted for the 2006 Unlawful Internet Gambling Enforcement Act which classified DFS as a game/ contest of skill. However, the Bluegrass State lacks proper legislation to legalize DFS betting.
Lawmakers are, however, making moves to ensure legislation. The first attempt was in the form of House Bill 414 (HB414) which was introduced in February 2017. The bill received a full-house vote and a favorable 37-36 vote, coming short of the Senate’s 40-votes requirement.
Should it have been successful, it would have been the ideal DFS bill. It proposed an initial licensing and also an annual renewal fee of $5,000, a tax rate of 6 percent.
There are two licensed DFS site you can use: FanDuel and DraftKings.
FanDuel represents the largest weekly and daily DFS league provider in the US. Recently, it received a financial backing of $300 million further reinforcing its position as the leading DFS site in the US.
DraftKings represents the best platforms for online DFS in the entire DFS betting industry. It is based in Massachusetts, and it records an annual payout of $1 billion. The site’s highly responsive and its members receive several options of DFS.
Horse Racing Betting in Kentucky
The horse racing industry is deeply-rooted in Kentucky with the Kentucky Derby as the state’ largest horse racing entity. The Derby is hosted by the Churchill Downs Inc. which got into the industry with following the acquisition of the Lady Luck Casino based in Vicksburg, Miss. The Horse Racing Commission regulates wagers on horse racing, but it does not legalize sports betting.
Thanks to technological improvements, you can stream races live straight from your home and thanks to proper licensing procedures, the number of Kentucky residents wagering on the races is on the rise.
BetAmerica, TVG, and Twinspires are the top licensed sites offerings horse racing betting services across the country.
The Future of Online Poker and Online Casinos
The Bluegrass State does not have laws that have legalized online casinos. However, interested persons can participate in online games of skill.
Regarding online poker, you shouldn’t expect Kentucky to be one of the states that legalize online poker any time soon. The main reason for this is that the state of Kentucky seized all the 141 poker sites and gambling sites back in 2008, without any notice to the operators. When questioned, the Commonwealth of Kentucky indicated that the sites were guilty of accepting wagers with disregard of the laws. One of the sites, PokerStars would, later on, agree to pay $6,000,000 for its domain, but the online poker scene has been non-existent since then.
You could, however, engage in the online lottery which is legal and accessible to Kentucky residents over 18 years and the ones with valid Kentucky addresses.
While online gambling remains largely inaccessible in the Bluegrass state, lawmakers have serious considerations over the expansion of the gambling scene on the internet. One lawmaker, Democrat Greg Stumbo noted that more Kentuckians are gambling online by visiting gambling sites based in other states. The other gleam of hope is in the form of gambling tax revenue from the horseracing and greyhound racing activities in the state.
According to the professor of law, Jeffrey Standen at the Northern Kentucky University Chase College of Law, the state’s constitution carries an exemption for betting on lottery game, and that could be used as the path to the legalization of not only sports betting but also gambling in general.
Currently, there are no land-based casinos or poker rooms in Kentucky.
Even though online sports betting Kentucky remains illegal and the residents of the Bluegrass State do not have that many gambling options, there is hope with changes in legislation expected in the future. At the moment, online lottery and online fantasy sports betting are legal activities you could participate in. Keep in mind that Kentucky is actively embracing the evolution of the betting landscape and could, in future legalize sports betting, poker, and casinos.