Kentucky Online Gambling Legislation Passes House and Moves to Senate

By a vote of 58-30, the Kentucky House passed House Bill 606. By the passage of this bill, various forms of online gambling moved one step closer to becoming a reality for the residents of the state. Some portions of the bill legalize online poker, sports betting, and daily fantasy sports with online casino gambling to be handled at a later date.

Getting the bill through the house was a real challenge. According to the bill’s lead sponsor, Rep. Adam Koenig: “It’s OK that it’s taken four years to get this far. Things worth doing are typically not easy and don’t always happen the first time. I’m excited and looking forward to seeing what my fate is in the Senate.”

Now, the bill will move onto the Senate along with House Bill 609, which would create the Problem Gambling Assitance Fund as a resource for the protection of the state's problem gamblers. This second bill had bipartisan support, passing by a vote of 81 to 40.

It's not clear how fierce the battle for these bills will be in the Senate. What is clear is that should these bills make it to the desk of Governor Andy Beshear, they would likely get signed without further issues.

What's in HB 606?

With HB 606 finally getting through the House, most of the details in the bill became public knowledge. Here are some of those details.

Online poker licenses can be issued without the online operator having any affiliation to a retail facility. In other words, online poker sites can apply for licensing without any other affiliation within the state.

Sports betting licenses will be made available to the state's five primary thoroughbred racetracks and selected harness racing tracks. The list of eligible thoroughbred racetracks would include Churchill Downs, Ellis Park, Keenland, Kentucky Downs, and Turfway Park. The list of selected harness tracks could include Red Mile Racetrack, Oak Grove Racing, and Cumberland Run (under construction).

Each license registration fee will cost operators $250K to be followed by an annual renewal rate of $10k per license.

Online poker gross revenues would be taxed at a rate of 6.75%. The tax rate for sports betting and Daily Fantasy Sports gross revenue has not yet been determined. That will be addressed at a later date.

Each racetrack will be permitted to take sports bets in two retail locations. However, one of the locations will need to be located within 60 miles of the applicable racetrack and at least 60 miles away from any of the other racetracks. This would affect the placement of retail sports betting facilities between Churchill Downs, Ellis Park, and Turfway Park.

While addressing the legalization of online gambling in Kentucky, the state legislature used this opportunity to pass another bill that affects the state's pari-mutuel tax rates. That rate will now be adjusted upwards from a historical rate of .5% to a new rate of 1.5%. This bill is likely to be signed into law very soon.