Kentucky online poker isn’t included in HB551, a bill to legalize online sports betting in Kentucky that was introduced on Feb. 22 by state Reps. Al Gentry and Michael Meredith. While Feb. 22 was the last day House lawmakers could propose legislation, this streamlined bill may have a better chance of passage than other pending online gambling bills.
The introduction of this bill may mean Kentucky won’t join the ranks of US online poker states during 2023.
Instead, Kentucky may join its northern neighbor, Indiana, in letting iGaming bills die in committee. On Feb. 21, Indiana online casino gambling didn’t meet the House deadline for proposed legislation to have a hearing.
Meanwhile, West Virginia online casino gambling became law in 2019.
However, Kentucky lawmakers may be less worried about that legal marketplace on its eastern border. Because now, the Bluegrass State is nearly surrounded by legal sports betting states.
So Kentucky lawmakers can see potential tax revenue driving out of the state.
UPDATE: 2:30 p.m. on 3/14/2023
The House secretary reported HB551 to the Senate.
The sports-only bill needs to be approved in the Senate this week if it will be presented to Gov. Andy Beshear to be signed into law in 2023.
It’s slated for a vote tomorrow.
UPDATE: 9 p.m. on 3/13/2023
HB551 passed that chamber of the Kentucky General Assembly in a 63-34 vote a little after 6 p.m. today.
That means it moves on to the Senate for consideration. If that body passes the measure, the governor will likely sign it into law.
However, last year’s measure died in the Senate without being brought to a vote. Notably, that bill included online poker, and this one is pure-play online sports betting.
If there’s a launch, 18-year-old sports bettors and other Kentucky adults won’t have to register in person, as the bill originally outlined. An amendment that would’ve outlawed using credit cards failed, with banker Meredith advising lawmakers that linking to bank accounts is more likely to result in identity fraud and data breaches.
Finally, the bill creates a “Kentucky problem gambling assistance account” and allocates 2.5% of “funds received in the sports wagering administration fund” to it.
UPDATE: 5 p.m. on 3/13/2023
HB551 was “posted for passage in the Regular Orders of the Day” today, but the House recessed a little before 5 p.m.
Meanwhile, Kentucky’s online gambling bills that included online poker haven’t advanced.
Opponents argue that just because something is popular with the public or could generate millions in revenue doesn’t mean it’s good policy. Richard Nelson, founder and executive director of the Commonwealth Policy Center, fears sports wagering would mainstream a vice, corrupt sports, and accelerate addictive gambling, especially among lower-income Kentuckians.
It seems like Kentucky lawmakers are taking their March 30 adjournment deadline to heart.
Yesterday, two of the three amendments to the online sports-only bill entered the committee that will need to consider them. On March 8, two other proposed changes to HB551 were filed in House Committee Substitute.
Yesterday’s amendments would change the online gambling age to 21 and prohibit credit card use. The most notable proposed change to HB551 among the March 8 committee referrals is removing the 12-month in-person registration requirement.
HB551 does still need a third reading and a House vote before it can move on.
Kentucky is closer to legalizing online sports betting, after HB551 saw a second reading yesterday. Bills require three readings before representatives can vote on them.
After that, the Senate will need to weigh in. That must happen quickly, as the Kentucky General Assembly adjourns on March 30.
Meanwhile, bills including online poker legalization haven’t advanced.
It’s appearing less and less likely that Kentucky will see legalized online poker during 2023.
Bills that include online poker legalization haven’t moved since Feb. 23, but the sports-only measure – HB551 – saw its first reading yesterday.
Stakes are high even for that proposed legislation, considering the Kentucky General Assembly adjourns on March 30.
HB106, or the proposed legislation including Kentucky online poker legalization and daily fantasy sports (DFS) regulation, moved into an essential committee on Feb. 23.
The 24-member, Republican-dominated House Standing Committee on Appropriations and Revenue is a hurdle any bill involving funds will need to jump in order to pass during this non-budget year.
Why HB551 May Do Better Than Bills Including Online Poker
There are a few reasons HB551 may be more popular with the Kentucky General Assembly than HB106 and SB73.
First, the proposed legislation is simple. It strips out Kentucky online poker legalization and daily fantasy sports (DFS) regulation measures that HB106 and SB73 contain. HB551 only asks for Kentucky online sports betting legalization in the 43-page-long bill that will add a new chapter to state law.
The second reason HB551 may pass is its primary sponsors are bipartisan. Gentry, D-Louisville, and Meredith, R-Oakland, are among the dozen bill sponsors who are also evenly split between the parties.
That may matter in a House that’s 80% Republican and a Senate with six Democrats out of 38 seats. All of the HB106 and SB73 sponsors are Democrats. Plus, five of the six HB106 sponsors are also among the six Democrats sponsoring HB551.
Because lawmakers aren’t voting on a budget in 2023, bills that appropriate funds need a three-fifths supermajority to pass. If votes go along party lines, the bills sponsored purely by Democrats may not fare well.
Finally, the bills that call for Kentucky online poker legalization haven’t moved far.
HB106, introduced on Jan. 5, last saw an amendment on Feb. 15 by Gentry. He added language to create a problem gambling fund. However, on Feb. 21, he sponsored HB486. That bill also creates a problem gambling fund.
SB73, sponsored on Feb. 7 by state Sen. David Yates, D-Louisville, moved into the Republican-dominated Senate Standing Committee Licensing and Occupations on Feb. 9.
With little time left before the legislature adjourns on March 30, HB551 still needs House and Senate approval before online sports betting can later be signed into law by Gov. Andy Beshear.
HB551 Sports Language Like Bills That Include Poker, DFS
Like HB106 and SB73, that call for a 6.75% tax rate on Kentucky online poker, HB551 would institute a 14.25% rate on online sportsbooks.
All measures would make Kentucky an affordable state for online gambling operators – especially compared with New York’s 51% tax rate on sportsbooks.
Online sports betting and retail sportsbooks, to be taxed at 9.75%, would be overseen by the Kentucky Horse Racing Commission (KHRC).
Tracks must pay an initial fee of $500,000 for a sports wagering license, and annual renewals will cost $50,000. Service provider license application fees cost $50,000, and annual renewals are $10,000.
Tracks can partner with up to three online sportsbooks. Gamblers must be 18 or older and need to register at the racetracks for the first 12 months after the law becomes effective.
Unsurprisingly, all of the bills resemble work former state Rep. Adam Koenig put in for years, sponsoring Kentucky online poker and sports betting bills. Koenig was in office from 2007 until Jan. 1, 2023. He lost his reelection bid in 2022.
However, Koenig continues to comment on Kentucky politics.
On Feb. 17, Koenig retweeted a Bonus tweet about the results of PokerStars uniting its Michigan and New Jersey player pools. The January 2023 revenue report from New Jersey showed a 76% increase in gross gaming revenue (GGR) vs. the operator’s December 2022 GGR.
Koenig added this comment:
Something we should be doing in Kentucky.
However, Kentucky online poker may not become a reality in 2023, let alone the necessary prerequisites for multi-state player pools.