Kentucky Sports Betting Law Goes In Effect Thursday: What Happens Next?

Kentucky Sports Betting Law Goes In Effect Thursday: What Happens Next?
Fact Checked by Nate Hamilton

Thursday marks a major milestone as Kentucky officials work to launch legalized Kentucky sports betting.

Under Kentucky statutes, bills signed into law during the General Assembly’s session that do not have an emergency clause officially take effect 90 days after lawmakers adjourn for the year. Thursday is the 90th day.

That’s when the Kentucky Horse Racing Commission, the agency regulating sports betting, will formally be on the clock. House Bill 551 calls on the KHRC to “promulgate administrative regulations to establish a fully functioning sports wagering system” by six months after the law takes effect.

The goal, though, is to launch sports betting in Kentucky by the start of the NFL season. However, it remains uncertain whether both brick-and-mortar sportsbooks and online sites will launch at the same time.

As commission officials have said several times, most recently at a meeting earlier this month in Lexington, they have been meeting with gaming regulators in other states to help them develop Kentucky’s rules and processes to license the state’s nine racetracks and potentially up to 27 online operators.

KHRC Chairman Jonathan Rabinowitz said at the commission’s June 20 meeting that it expects to hold a meeting early next month to approve the regulations staffers have crafted over the last couple of months.

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Meredith: Kentucky No Longer On An Island

BetKentucky talked Tuesday with state Rep. Michael Meredith, the Oakland Republican who was the lead sponsor on the bill. He said the people he has spoken with since HB 551 became law are eager to see sports betting launched in Kentucky.

“The passage of the law and its going into effect takes away the stigma of us being the state that was on an island for so long,” he said.

Meredith believes Kentucky will be a very competitive sports betting state for several reasons. Kentucky’s low licensing fee structure – the tracks will pay a $500,000 licensing fee and renew it annually for $50,000 while operators pay $50,000 for a license and $10,000 for an annual renewal – should make it easier for operators to enter the state. The state will tax sports betting revenues at 9.75% for brick-and-mortar sites and 14.25% for online sites.

He also believes the regulations will allow for a “fairly open prop betting marketplace” and that the law, which allows adults 18 and up to register for accounts, will bring more bettors out of the unregulated market and into a legal one where they will have protections.

“I think we potentially can take some customers away from the other states around us because some things that we’re going to offer that they don’t,” Meredith added.

The only issue, in retrospect, that Meredith said he wished could have been covered in HB 551 was to do more for problem gambling services. The bill establishes Kentucky’s first state-run program and allocates 2.5% of the tax revenues generated from sports betting revenues to an assistance fund. However, he wished the bill could have included other forms of gambling, such as live and historical horse racing, to also contribute to that fund. It’s an issue he’s already discussing with state Rep. Matthew Koch, the Paris Republican who chairs the House Licensing, Occupations and Administrative Regulations Committee for possible future legislation.

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Next Steps For Kentucky Sports Betting

So, now that the clock has officially started. What will happen next?

The KHRC expects to pass both emergency and permanent regulations in a meeting expected to occur in early July. According to state statutes, the emergency regs will go to Gov. Andy Beshear, and they will take effect once he signs off on them and they are received by the state’s Legislative Research Commission.

That will help Kentucky officials get a start on the licensing review and approval process. As Meredith noted, HB 551 allows the KHRC to offer tracks and operators temporary licenses. According to the new law’s language, the commission can do so if it “deems that the information submitted by them is sufficient to determine the applicant’s suitability.”

While the emergency regulations are in effect, state lawmakers will review the permanent regulations. Legislators will also review the emergency rules.

If lawmakers want changes to any emergency regulation, they will ask the governor to withdraw or amend the rule, but the governor can also keep the rule in place.

It would be up to the KHRC to amend permanent rules if lawmakers find deficiencies in them.

During his weekly press conference in Frankfort Thursday, Beshear said he was “thrilled” at how fast officials were working to implement regulations. While he said a launch by the start of the NFL regular season was “a very aggressive goal,” the governor added he’s confident the state will be able to hit that goal.
“Our Horse Racing Commission is doing a great job,” Beshear said. “All the partners are working in good faith. The governor’s office is right there with them, both contributing substantively but also reminding everyone each day that we have to get this done under that timetable.”

The Kansas City Chiefs, last season’s Super Bowl champion, will host the Detroit Lions on Sept. 7 to kick off the 2023 season. That game is 10 weeks from Thursday.

Learn More: Latest Super Bowl Odds

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Steve is an accomplished, award-winning reporter with more than 20 years of experience covering gaming, sports, politics and business. He has written for the Associated Press, Reuters, The Louisville Courier Journal, The Center Square and numerous other publications. Based in Louisville, Ky., Steve has covered the expansion of sports betting in the U.S. and other gaming matters.

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