A bill to legalize sports betting in Kentucky was advanced by a Senate committee on Wednesday, leaving its supporters still facing their biggest challenge as opponents mounted a last stand.
The panel sent the measure to the full Senate, setting up a potentially dramatic vote on whether the state that’s home to the Kentucky Derby should let its residents legally wager on other sporting events.
“The people of Kentucky want this,” Senate Majority Floor Leader Damon Thayer said. “It’s time that we give them the choice — for free will, God-given free will — to engage in legal sports betting.”
The bill’s Senate prospects are uncertain, due to a higher procedural hurdle to overcome. It needs a three-fifths vote in each chamber to pass, since it’s a revenue-producing bill in an odd-numbered year. The bill passed the House recently, but the Senate has been seen as the bill’s toughest test.
It still needs to receive procedural readings in the Senate, meaning a showdown vote could occur in late March during the final two days of this year’s legislative session. Lawmakers begin an extended break after Thursday to allow Gov. Andy Beshear to consider signing or vetoing bills sent to him. The Democratic governor has been a strong supporter of legalized sports wagering in Kentucky.
The measure was on friendly turf Wednesday in the Senate Licensing and Occupations Committee, which easily approved it.
Republican Rep. Michael Meredith, the bill’s lead sponsor, said it would regulate activity already entrenched in Kentucky. He pointed to estimates that Kentuckians place around $1 billion in sports wagers each year in what he called the “illegal and unregulated” marketplace. Other Kentuckians simply cross the border to place sports wagers in neighboring states where it’s legal, he said.
“It creates a regulated marketplace for sports wagering that takes this activity out of the darkness, out of the shadows and into the light in a regulated format,” Meredith said of his bill.
Opponents called sports betting a highly addictive form of gambling, and warned the social costs would accumulate, hurting families, if the bill becomes law. The result would be “more broken families, increased addictions and divorce,” said David Walls, executive director of The Family Foundation.
The bill would “turn every iPhone in Kentucky into a digital casino” for wagering on sporting events, Walls said. And the bill comes at a time when high inflation is pinching family budgets, he said.
In response, Meredith said: “I don’t stand here to debate anyone’s morals or their religious convictions. But again, we know this is happening in the marketplace already, either illegally or just outside the boundaries of our commonwealth. And so I think it’s smart that we regulate this as a state.”
If legalized, sports wagering in Kentucky is expected to generate about $23 million a year in tax revenue and licensing fees, Meredith told the Senate committee.
House Bill 551 would allow Kentucky’s horse racing tracks to be licensed as sports betting facilities for a $500,000 upfront fee and an annual renewal fee of $50,000.
Participating tracks could contract with up to three service providers to provide sports wagering services at the track itself, or through online sites and mobile applications. Service providers would have to pay $50,000 for an initial license, with a $10,000 annual renewal fee.
Under the bill, the Kentucky Horse Racing Commission would regulate sports wagering operations.
Revenue generated from taxing such wagering would cover those regulatory costs. A percentage of the revenue would go into a fund focused on dealing with problem gambling. The leftover revenue after that would flow into the state public pension system.