In Kentucky, the Interim Joint Committee on Licensing, Occupations and Administrative Regulations held its second meeting regarding sports betting, in preparation for the 2019 legislative session that starts in January. At the 2-hour hearing, legislators heard from a wide range of gaming industry officials from the Kentucky Lottery Commission, the Poker Alliance and IGT and Scientific Games, who also demonstrated sports betting terminals.
The hearing’s organizer, House Licensing and Occupations Chairman state Rep. Adam Koenig, said, “The goal was to get members of the committee up to speed on the issues and I think our presenters did a great job of doing that. I learned a couple of things, but I think our committee members learned a lot.”
Gaming hospitality consulting group Global Market Advisors Director of Government Affairs Brendan Bussman said Kentucky could receive $10.4 million – $104 million in revenue from legalized sports wagering. He explained tax rates among states where sports betting is legal range from 6.75 percent in Nevada to more than 50 percent in Rhode Island, where casinos and the state lottery have a partnership arrangement. Bussman added low tax rates help create additional activity, and draw business away from the illegal market.
Kentucky Lottery Corporation President and Chief Executive Officer Tom Delacenserie said lawmakers must consider where wagering will be available, such as horseracing tracks and other brick and mortar retailers, as well as mobile/online as options. Koenig stated online betting would be vital to any sportsbook. He cited New Jersey’s September sports betting financial report that showed bettors wagered $105 million online and $79 million on-site at sportsbooks. Koenig added online betting covers in-play or “live” wagering, which can move too fast for patrons to wait in line to place a bet at a sportsbook.
Koenig said he opposes allowing betting on in-state teams. But Bussman said, “I find it almost silly that states feel like they need to take these off the table, because then they are leaving it to the black market. Why take something off the table when you’re not protecting anyone?” He said not allowing betting on in-state teams, like the University of Kentucky, takes revenue from the state.
No representatives from professional sports leagues attended the hearing. Last month, the National Football League, National Basketball Association, Major League Baseball and the Professional Golf Association Tour all registered lobbyists in the state. The leagues have been lobbying states for a 1 percent integrity fee supposedly to cover the costs of monitoring games when states legalize sports betting.
Koenig said, “The pro leagues have offered, but I think we need to get our people up to date first before we start throwing in the pro leagues. When the lobbyists got confirmation that they were registered in Kentucky, they called me immediately to tell me. The first words out of my mouth were, ‘You’re not getting an integrity fee. Vegas has been taking sports bets since 1949 and they don’t pay an integrity fee, so does that mean that they were not on the up and up?’” He added Kentucky lawmakers unanimously oppose adding an integrity fee to sports wagers.
Bussman added, “Those organizations stand to make as much, if not more money off things like data feeds, sponsorship dollars or media rights or fan engagement. There’s a reason why MGM partnered with NBA and the Dallas Cowboys with a casino. Those are going to be additional revenue sources for these teams and leagues. Integrity is in the law, not in the fee.”
Regarding sports betting legislation, Bussman said, “I think you definitely will see one if not multiple bills in Kentucky. There is definitely a will within some of the active members there who want to bring this up, and there is no reason why they shouldn’t.”
