Adam Koenig is a familiar name in the Bluegrass State, considering he spent 16 years in the Kentucky House of Representatives. However, he should probably also be known for the $225 million problem gambling fund he tried to set up in 2022. Bonus believes it might be the most ambitious attempt a state legislator’s proposed to date, and it came a year before Kentucky legalized online sports betting.
Now that sports betting is legal – Gov. Andy Beshear signed it into law in March – Bonus contacted Koenig to look back at his bill that died without a vote in April 2022. Plus, Koenig answered general questions about problem gambling efforts in Kentucky and the US.
Adam Koenig’s Problem Gambling Bill
Koenig introduced HB609 on Feb. 28, 2022. He wanted it to “appropriate $225,000,000 from the general fund in fiscal year 2022-2023 to the Kentucky problem gambling assistance fund.” That specific and large number resulted from a settlement the state received from Flutter Entertainment because of that online gambling company’s brand, PokerStars.
Before Flutter owned PokerStars, the online poker site was accused of illegally accepting bets from Kentuckians.
Online casino gambling still isn’t legal in Kentucky – nor is much of anything besides horse racing wagering and now online sports betting. In a US map showing land-based casino states, Kentucky is in select company with Georgia, Hawaii, Utah, and South Carolina in not housing casinos, according to the American Gaming Association (AGA).
So in 2010, Kentucky sued PokerStars to recoup the money Kentuckians lost playing online poker. In 2021, Flutter settled the PokerStars lawsuit for $300 million.
Koenig then proposed putting the funds the state finally received into helping problem gamblers.
He tweeted on the day he introduced HB609:
What better use of that money than to put it to problem gaming?
On a side note, Flutter brand FanDuel Sportsbook is expected to be in the Kentucky sports betting marketplace.
Kentucky Sports Betting Launches ‘Soon’
Meanwhile, Kentucky’s online sportsbooks don’t yet have a scheduled launch date, but “soon” is a fair estimate.
Yesterday, Beshear’s Team Kentucky Update included this:
The Kentucky Horse Racing Commission is now hiring employees in wagering compliance to prepare for the launch of sports wagering. The commission is actively engaged with officials from other states and industry experts, reviewing regulations and best practices. In the initial round of hiring, the commission will hire dedicated professionals to support wagering compliance efforts, including advisors, analysts, auditors, and other crucial roles in regulating the sports wagering industry.
Beshear then provided a link to the KHRC website for “interested candidates.” There, Bonus also found a link to “sign up for sports wagering updates.” After Bonus did so today, no sports betting updates arrived.
The common wisdom is Kentucky regulators are attempting to meet a pre-NFL season deadline. Football kicks off on Sept. 7 with the 2022 Super Bowl champions, the Kansas City Chiefs, playing the Detroit Lions in Kansas City, Mo.
The closest anyone’s come to providing a solid start date is Caesars Sportsbook, which only says it’ll happen “later this year.”
Much like Kentuckians experienced during the previous NFL session, Missourians can’t place sports bets in their home state for the Kansas City team. Bettors must cross the border into Kansas to wager legally.
Similarly, Kentucky’s Cincinnati Bengals fans crossed into Ohio to place their bets when that marketplace launched on Jan. 1, 2023, according to GeoComply.
Update: Beshear said lawmakers and regulators are “committed” to launching sportsbooks by the NFL kickoff, reported Matthew Bain of (the now-defunct) PlayKentucky on June 1. Like Bonus, PlayKentucky was a Catena Media brand.
Adam Koenig Then and Now
Koenig’s last day as Rep. Adam Koenig, R-Erlanger, was Jan. 1, 2023. He’d lost his Republican primary in May 2022.
Among his many accomplishments in office was his advocacy for legal gambling. For years, he proposed bills to legalize online sports betting and online poker. Koenig also proposed measures to help Kentuckians with gambling addictions.
While HB609 will be the highlight here, Koenig sponsored legislation that’s now Kentucky law. He’s also a prominent enough figure to Kentuckians that he has his own Wikipedia page.
However, he’s humble enough that Koenig didn’t mention the page – Bonus found it.
On his LinkedIn page, Koenig lists his profession since January 2023 as an independent consultant with Koenig Public Policy and Political Consulting. He’s also a Realtor. Plus, he’s the first executive director of the Kentucky Quarter Horse Racing Association, according to the Jan. 24 Paulick Report.
Kentucky is nearly synonymous with the horse industry, horse racing, and parimutuel betting. So the former representative has stepped into another visible, influential role at an organization Kentuckians consider a household name.
The Q&A
Below, Bonus questions are in bold. Koenig’s answers are below, presented verbatim.
Do you believe HB609 would’ve created the best-funded problem gambling program in the country?
Absolutely! What I proposed would have been the best-funded program in the country.
This was one-time money resulting from a court settlement with Flutter after a 10-year court battle. The details are too long to go into, but it was a suit brought against poker site operators that were still open to players in Kentucky after Black Friday and later obtained by Flutter. It was over $200 million, and I reasoned that what better use of money that came from an illegal betting lawsuit than to address problem gaming.
The interest alone would have funded a robust program for longer than any of us would live.
Why do you think it failed?
I managed to get it through the House in 2022 (after a floor amendment [lowered] the amount to $50 million), but it did not get a hearing in the Senate.
It was a bold move to try to put that much money into problem gaming, and it was a long shot.
My guess is that many legislators saw other opportunities to spend that money differently.
Either way, it raised the profile of the issue of problem gaming, and that was a positive step.
Do you think Kentucky is meeting the needs of problem gamblers now?
No, we are not meeting the needs of problem gamblers now, but help is on the way. Rep. Michael Meredith’s bill this year that legalized sports betting sets aside 2.5% of the state’s revenue into a problem gaming fund.
In fact, from what I heard, that addition was vital in getting the bill through the Senate.
So there is a realization that the need is there.
Also, Rep. Meredith believes that in the future, sports betting revenue should not be the only gaming revenue that is used to address this issue.
What should Kentucky lawmakers do about problem gambling prevention and treatment?
One issue I believe needs to be addressed [is] preparing our mental health professionals to address this particular issue. Kentucky has two publicly funded medical schools, and they should be at the forefront of this preparation. Additional monies should be used to fund professional treatment and public awareness. Plenty of other states have programs, and we don’t need to reinvent the wheel.
Are you hearing more talk in 2023 or the same as previous years re: ‘We should help problem gamblers’?
[I] think I covered that in [answers] 3 and 4.
Do you think Kentucky is responding at the same level as other states to problem gambling?
I am not up on what other states are doing. But my guess is that, as of right now, we are well behind most other states. But, as I said, help is on the way.
Now that sports betting is legal, is problem gambling addressed in Kentucky?
See 3.
Why do lawmakers who say problem gambling is a crisis not fund prevention and treatment?
That is a complicated question that delves far into politics.
I will never forget a brief conversation I had off the House floor with a fellow Republican representative from eastern KY about my problem gaming bill. Now this individual and I don’t see anything the same way at all. He is a preacher and would eliminate all forms of gaming and go back to prohibition if he could. In an attempt to be nice and, of course, try to get a vote for my bill, I said something to the effect of “I know you don’t like my gaming bills, but you have to like my problem gaming bill.”
He answered in a low but angry voice when he said, “That’s money that could go to help my people.” Meaning with roads and other public projects. I just shook my head and walked away.
Problem gaming bills and help don’t get you votes.
In most places, roads, bridges, senior centers, and other tangible items do.
What do you think of lawmakers in other states who also talk the talk but don’t fund programs?
[I] haven’t really given it much thought.
What sort of federal response do you believe there should be?
As a former state legislator, we generally don’t like it when the federal government gets involved with these things. It was their misguided policy that kept people from legally betting on sports for decades!
I’m good with them not being involved.
In fact, I think they need to modernize the Wire Act to reflect today’s realities of online wagering.
[Author’s note: Here’s an explanation of the Wire Act as it relates to online gambling.]
Should racetracks, casinos, and online gambling operators provide more funding?
I think there should be adequate funding to address the issues that occur. I’m sure in some states, they are providing an adequate amount, and in other states, they are not. There does seem to be more awareness from operators to make sure their customers stay within their limits, and that is encouraging. It is good business not to have so many customers develop problems if at all possible.
Does problem gambling still concern you as much as it did when you proposed the fund?
Problem gaming is getting more and more attention, and I think that is a positive. It probably is a part of the society’s overall embrace of mental health awareness.
Do you think there’s a solution to problem gambling?
I believe there are solutions to addressing the needs of problem gamblers. The industry and the professionals need to continue to research improved methods of addressing this issue, especially as iGaming and other things like gaming in the MetaVerse expand.
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