House committee advances bills related to legalized gambling in Kentucky
A Kentucky House Committee voted Wednesday to approve a legislative package that includes legalizing sports wagering, banning unregulated gambling machines commonly referred to as “gray” machines, modernizing pari-mutuel wagering statutes, and creating a fund to fight gambling addiction. The bills comprise an omnibus approach to overhauling the state’s approach to legalized gambling.
House Bill 606 seeks to legalize most forms of sports wagering and regulate the taxation of all online gambling including fantasy sports and online poker. If passed, consumers would have the same access to online betting accounts in Kentucky as in neighboring states such as Indiana, Tennessee, and Illinois.
“At the end of the day, this bill allows adults to make adult decisions. With statistics showing that over half of our state’s population supports legalizing sports wagering, we need to ask ourselves if it truly is in the best interest of the people of Kentucky to prevent adults from legally placing a bet,” said Rep. Adam Koenig, the bill’s primary sponsor. “These bets are being placed today and we’re not getting any of the benefit, but do experience the costs.”
House Bill 608, sponsored by Rep. Killian Timoney, would prohibit gambling machines that are not associated with the Kentucky Lottery, charitable gaming or historical horse racing. He said it would prohibit “gray machines,” or skill game machines, from operating in Kentucky. Currently, gray machines are not regulated by statute, and some lawmakers and legal experts question their legality.
“There is a clear line drawn in the sand for what is legal and what is not for gaming machines in our state, and now is the time to address the bad actors in the industry who are ruining it for those who are playing fair,” said Timoney. “Making sure these games are eliminated evens the playing field for consumers and developers alike while upholding the law.”
Mary Harville, CEO of the Kentucky Lottery Corp., said the Kentucky Lottery funds college scholarships, and those funds are already in jeopardy due to the rise of skill games in counties across the Commonwealth. Skill games machines are typically located at gas stations and conveniences stores, which are popular Kentucky Lottery retail locations.
Harville testified the lottery is expected to lose $60 million annually if the General Assembly does not take action on gray machines.
House Bill 607 is legislation that would address discrepancies in pari-mutuel wagering and the revenue raised from it. HB 607 proposes a 1.5% tax on all pari-mutuel wagers, including Historical Horse Racing (HHR), simulcast, and Advance-Deposit Wagering (ADW). This measure would also mandate that the Kentucky Horse Racing Commission would be responsible for generating their own operational funds, which would in turn save the General Fund $3 million a year, while generating an additional $20 million in general fund revenue through capping funds flowing into the Kentucky Thoroughbred Development fund.
House Bill 609 is a measure which would address problem gambling in the state. HB 609 would create a funding mechanism to help Kentuckians dealing with a gambling addiction by establishing a trust to address awareness, prevention, and treatment. The measure would allocate $225 million from the General Fund from a historic settlement with Flutter Entertainment as a result of the PokerStars lawsuit filed by the state in 2011 and settled in 2021.
All four bills cleared the House Licensing, Occupations and Administrative Regulations Committee. They will now go before the full House for consideration.