Bill authorizing wagering on sports in Kentucky gained overwhelming support in House committee
A bill calling for the legalization of sports betting in Kentucky swept through a House committee vote on Wednesday, but it still needs to overcome a number of legislative obstacles, including a 60% majority support in the full House, which many believe would be an extremely challenging task.
Sponsored by Rep. Adam Koenig, House Bill 175 authorizes the provision of sports betting at the state’s existing horse racetracks or at the Kentucky Speedway in Sparta as well as via a mobile betting app. However, if bettors want to place bets using their smartphones, they will first need to register in person at a licensed location so that they verify their identity and that they are of legal gambling age.
HB 175 gained overwhelming support by the House Licensing, Occupations and Administrative Regulations Committee during yesterday’s vote. However, it still has a long way to go as it will have to gather at least 60 affirmative votes out of 100 to pass the full House floor.
Aside from in-person and mobile betting, the bill will also legalize online poker and fantasy sports, if it survives all pending legal hurdles.
Revenue for the State’s Pension System
If HB 175 takes affect as a law and sports betting goes live in Kentucky, in-person operations will be taxed at 10.25% on revenue, while online operations will be charged a 14.25% tax on revenue. Most of the tax revenue generated from sports betting will be used by state lawmakers to narrow a gaping pension deficit that currently stands at more than $40 billion.
A significantly smaller amount of the tax money contributed will be allocated to a gambling addiction treatment and prevention program.
Of Kentucky’s neighboring states, only West Virginia went live with sports betting following last May’s ruling of the US Supreme Court that struck down a federal ban on wagering. West Virginia lawmakers passed a sports gambling legislation in the spring of 2018 in anticipation of the SCOTUS decision and launched legal betting in August.
According to projections, Kentucky could reap nearly $50 million in annual tax revenue, if it manages to legalize sports betting before the rest of its neighboring states. However, if other surrounding states authorize the practice, analysts believe that Kentucky could annually collect around $20 million in betting taxes.
Commenting on what is next for his bill, Rep. Koenig said yesterday that he does not know how it is going to go and that they will now “have to work on talking to other members.” The legislator went on to say that they have a good chance to get HB 175 passed “if everyone votes their conscience.”
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