Former Kentucky Governor, state Senator Julian Carroll, recently pre-filed BR 29, a measure allowing sports gambling. Carroll is one of the nine members of a panel formed to advance sports gambling legislation in the state. Kentucky has nine horseracing tracks and OTB parlors, including Churchill Downs, that would be able to apply for a sports betting license.
The latest bill is similar to Carroll’s 2018 measure. Revenue generated for the state would be split 50-50 between the Kentucky Horse Racing Commission and a trust. The racing commission would use its portion of the revenue for integrity monitoring; 60 percent of the portion earmarked for the “sports wagering distribution trust fund” would go to the Kentucky Employees Retirement System Nonhazardous Retirement Fund and the Kentucky Teachers’ Retirement System pension fund.
Carroll said, “Now that sports wagering is legal, it is abundantly clear we must protect the public and, fortunately, it will generate much needed revenue for our public pensions and education system.”
The bill also would require the Kentucky Horse Racing Commission to set up a sports wagering system for horse racetracks and off-track betting facilities. Operators would be charged a $250,000 annual license fee with an annual renewal of $25,000. Betting would be permitted on professional and collegiate sports.
A controversial element of Carroll’s proposal is that handle would be taxed at a rate of 3 percent. His previous bill had a 20 percent tax rate on handle. But, observers said, the new rate of 3 percent translates into an effective tax rate of nearly 60 percent. Nevada taxes sports betting revenue at 6.75 percent. “I decided to tax total amount wagered to conform sports wagering to our parimutuel wagering tax on live horseracing,” Carroll said.
In addition, the commission could require any sports betting licensee to provide access to its balance sheet and earnings statement at any time. Also, a participant in a sporting event who tampered with the outcome of a sporting event could be charged with a Class C felony.
The bill does not include the integrity fees promoted by major league sports, although the governor could include officials from Major League Baseball, the National Basketball Association and the National Football League, plus the National Collegiate Athletic Association, among the 15 appointees to the commission.
If sports betting becomes legal, according to Carroll’s bill, the commission would be required to “Develop programs and procedures that will aggressively fulfill its oversight and regulatory role on sports wagering to ensure that undue influence is not brought to bear on the outcome of any athletic event due to wagers placed upon the event.”
Carroll noted, “The horseracing tracks or off-track wagering facilities in Kentucky already have the infrastructure to offer sports wagering. And when legislation is passed next session the racing commission will be able to quickly implement the law.”
