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Sports betting bill passes Kentucky House committee

Baishampayan Ghose/Creative Commons

Using your smartphone to wager on sporting events would be legal in Kentucky under a bill that passed unanimously out of a state House committee Wednesday.

House Bill 606 would legalize and establish rules for most forms of sports gambling, including fantasy sports and online poker. The revenues raised would be used to support the state pension fund.

Similar bills have advanced in the legislature in recent years, only to stall amid opposition from conservative legislators. But Rep. Adam Koenig of Erlanger, a Republican and the bill’s sponsor, said fortune is on his side this year.

“I think we’re in a position to hopefully have better luck going forward out of this committee,” Koenig said. “What this essentially does…is allow for wagering on sports as happens in 33 other states and the District of Columbia today.”

The bill was one of several gambling-related bills that passed Wednesday, including measures that would update pari-mutuel wagering laws, create a problem gambling assistance fund and ban certain kinds of gambling machines. The bills now move to the House floor.

Similar sports wagering bills have failed in the past, revealing the divide in the state between a love of sports and horse racing, and concerns that gambling could prey upon vulnerable families and erode moral values.

The Family Foundation, a conservative Christian organization, has long opposed the effort to legalize sports betting in the state. Executive Director David Walls said the bill is designed to transfer wealth from impoverished residents to the gambling industry.

“This type of predatory gambling is designed to prey on human weakness with the government colluding with the gambling industry to exploit our fellow Kentuckians,” Walls said.

Koenig downplayed the negative consequences of increasing gambling in the state saying that the “parade of horribles” described by the bill’s opponents has failed to materialize in other states that have legalized sports wagering.

“According to the American Gaming Association, there is $2 billion wagered illegally in Kentucky every year and I think it’s important to bring those people out of the shadows and dry up the black market,” he said.

Koenig is also sponsoring House Bill 609, which would set up a problem gaming assistance fund and board to raise awareness about gambling addiction, establish programs to help and pay costs associated with treatment.

The bill would use $225 million stemming from a lawsuit against PokerStars, which collected losses from thousands of Kentuckians who played on its websites.

The committee also passed House Bill 607 that Koenig says would “modernize” pari-mutuel wagering – the betting system most commonly used at racetracks. That bill would establish a single tax rate for pari-mutuel wagering of 1.5% and eliminate admission tax. Koenig said that bill would bolster state revenues by around $27 million “in a couple years.”

House Bill 608, which would outlaw so-called “gray machines,” also passed committee. Critics say the slot-like gambling machines aren’t “skill games,” are illegal in Kentucky and fall outside of the state’s regulations.

Kentucky Lottery Corporation CEO Mary Harville testified the proliferation of gray machines in convenience and grocery stores throughout the state has eaten into the lottery’s profits, which support Kentucky college scholarships.

“We have had retailers move our equipment over to make room for the gray machines, we have had retailers tell us to take out the lottery entirely, we need it to make room for the gray machines,” Harville said.

Opponents of the bill included former state Justice Cabinet Secretary John Tilley, who is now lobbying for the gaming industry. Paul Goldean, CEO of skill games maker Pace-O-Matic, said the machines provide revenue to small businesses.

“During regular economic times, small businesses expand with our products,” he said. “In harsh economic times, as we’ve seen with COVID and the current rise in inflation in the state and the country, our games are a lifeline for small businesses.”