With emergency Kentucky sports betting regulations being filed on July 10, the Kentucky Horse Racing Commission (KHRC) unanimously approved allowing 27 online sportsbooks to launch on Sept. 28. The more permanent regulations will be in place by the Sept. 7 retail sports betting launch.
Before the body unanimously approved the emergency regulations today, they heard from the commission’s general counsel, Jennifer Wolsing. She said these emergency rules and the permanent or “ordinary” regulations must also go through a public comment period.
Wolsing and the commission convened at Red Mile Gaming and Racing in Lexington this afternoon in a special meeting to approve Kentucky sports betting regulations. The KHRC was trying to meet a largely self-appointed deadline of launching the online gambling marketplace before the NFL season begins on Sept. 7.
Kentucky Gov. Andy Beshear had also said he wanted to see HB551 in action by then. He signed the esports and sports betting bill into law in March.
However, today’s unanimous approval of the sportsbook regulations only has retail sportsbooks meeting the NFL kickoff deadline.
KHRC Deputy Executive Director Waqas Ahmed told the commission that this 37th US sports betting jurisdiction is being set up to benefit Kentucky’s local industry and the public.
Meanwhile, Kentucky’s esports and sports betting launch date is approaching much faster than North Carolina’s. That state is scheduled to go live in 2024. Like Kentucky, North Carolina is lumping esports in with sports betting, even though the former involves gambling on the outcome of video game tournaments.
Once Kentucky’s sportsbooks go live, they’ll see a 14.25% tax rate on online sportsbooks and a 9.75% rate on retail sports betting. That may generate $23 million in yearly tax revenue.
Kentucky Sports Betting Regulations Start the Process
Wolsing said Kentucky sports betting regulations will allow nine operator licenses to partner with up to three service providers each.
In the commonwealth, those licensees are racetracks that will form agreements with sportsbooks.
Using today’s meeting place as an example, Red Mile and Keeneland racetracks are partnering with Caesars Entertainment.
In Caesars’ announcement about the agreement on May 16, the company said it would adhere to its corporate policy. That policy allows gamblers 21 and older to place bets on Caesars Sportsbook. While that may not seem controversial, Kentucky’s law allows anyone 18 or older to wager on sports.
However, Red Mile already prohibits anyone under 21 from entering its gaming floor. The harness track established in 1875 will presumably adhere to that gambling age in its new sports bar and lounge, Red Bar.
That seems to be the case for the other apps, too. Bet365 Sportsbook, DraftKings, FanDuel, and other Kentucky sportsbooks are so far listed as 21-plus.
Beshear issued a press release today that included this list:
Kentucky Facilities Eligible To Apply To Be Sports Betting Locations
• Churchill Downs Louisville
• Cumberland Run, coming soon to Corbin
• Derby City Gaming in Louisville
• Derby City Gaming, coming soon to downtown Louisville
• Ellis Park Owensboro, coming soon
• Ellis Park, Henderson
• Keeneland, Lexington
• Kentucky Downs, Franklin
• The Mint Gaming Hall, Bowling Green
• Newport Racing and Gaming, Newport
• Oak Grove Gaming and Racing, Oak Grove
• The Red Mile in Lexington
• Sandy’s Gaming and Racing, coming soon to Ashland
• Turfway Park, Florence
When Beshear signed the emergency regulations into law, the statement his office released said that starting tomorrow:
Each of Kentucky’s licensed horseracing facilities can apply for a retail sportsbook at their main location or at a licensed satellite location. The state anticipates that each facility will open a retail location, and many will be ready to launch Sept. 7.
Staffers Will Enforce the Regulations
On May 31, Beshear announced the commission was hiring in order to support legal sports betting in Kentucky.
Today, KHRC Chairman Jonathan Rabinowitz said Beshear will back the commission if Kentucky needs more than the current 14 roles allotted to support the new marketplace. Staffers now include sports wagering leaders, investigators, analysts, and administrators.
Rabinowitz said today:
If we need more, we’ll get more.
During the previous meeting on June 20, Rabinowitz said KHRC contracted with Gaming Labs International (GLI) for consulting services and staff training.
In today’s special KHRC meeting that was the first video streamed on the commission’s YouTube channel, Rabinowitz added:
The governor has gone out of his way to make sure that we have all the staffing and resources necessary to get the job done.
The Ohio Advantage?
To draft the Kentucky sports betting regulations, Rabinowitz said KHRC staff, KHRC commissioners, and members of the state’s Public Protection Cabinet (PPC) met with regulators from other states, industry experts, service providers, and licensed associations.
One of those states was Ohio.
It’s likely hard for Kentucky leaders to forget that residents began crossing the border and traveling north into Cincinnati to bet after Ohio launched sports betting on Jan. 1, 2023. Cincinnati Bengals fans were making that an apex of wagering, according to GeoComply.
However, Ohioans may soon be driving south to bet in Kentucky.
That’s because Ohio Gov. Mike DeWine signed a 20% tax rate on operators into law on the Fourth of July.
Doubling the tax rate on sportsbook operators in Ohio may mean that state will see less attractive promo offers, as has happened when sites decrease their spending.
However, promos within Kentucky’s borders may be more attractive if the 14.25% tax rate means operators spend that money on bettors. Plus, sportsbooks trying to sign up new account holders may also benefit bettors.
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