A bipartisan group of nine Kentucky lawmakers recently met to discuss options for sports betting. The working group reviewed how other states, including Mississippi and Pennsylvania, are handling the issue. Former Governor and state Senator Julian M. Carroll said, “We broadly discussed how sports wagering legislation has developed across the country and how we envision it take shape here in Kentucky. My priority has been and remains to protect Kentuckians by regulating sports wagering and generating new revenue for Kentucky’s ailing pension systems.”
Carroll pre-filed a sports betting bill in June. So did state Rep. John Sims and state Rep. Dean Schamore, also members of the working group. Carroll’s bill would allow sports betting at the state’s racetracks and OTB parlors. It calls for a 20 percent tax on handle, which possibly could cause operators to claim they can’t make enough money, as in Pennsylvania which charges a 36 percent tax on gross revenue. Carroll said the tax rate on handle is similar to Kentucky’s tax structure for parimutuel wagering.
State Senator Morgan McGarvey, also a member of the working group, said he thought the chances of lawmakers passing a sports betting bill next year are “good.” He added, “This is a way we can get revenue without using the dreaded word ‘tax.’ This is not a panacea. It’s not going to cure all of Kentucky’s financial woes. But it is a way to get some money coming to already depleted coffers,” to partially offset shortages in Medicaid, university funding and infrastructure. McGarvey estimated legalized sports betting could bring in $5-$30 million annually.
Kentucky Center for Economic Policy Executive Director Jason Bailey noted, “Sports betting is only a very tiny potential revenue source, and should not be taken seriously as far as a revenue option that would really help our budget. The margins on sports betting are simply too low to generate much tax revenue from it. It would look like a rounding error in the state budget — likely less than 0.1 percent of the total General Fund revenue we collect.”
A version of a sports betting bill in the House would authorize the state lottery commission to oversee sports betting and also add retail lottery outlets to locations where sports wagering would be allowed. State Rep. Jason Nemes said, “This is not going to be all over the place, all over Kentucky. We’re not talking about casinos in every county. It will be at places that are licensed. If a person thinks sports betting is wrong, I respect that, and they don’t have to go and gamble.”
Opposing sports betting is the conservative Kentucky Family Foundation. Spokesman Martin Cothran said, “There are just too many problems associated with it. When you’re talking about doing it at the level it would have to be done to gain the financial benefits the proponents want, there is nothing you’re going to be able to do at that level. I think we’re going to find that there are enough legislators in our general assembly who believe that we need to honor the constitution that clearly disallows this kind of gambling.”
Governor Matt Bevin has spoken against sports betting in the past but recently said he would be open to hearing legislators’ proposals.
Carroll said, “The working group will continue these discussions in future meetings to discuss details on the appropriate agency to administer sports wagering, the venues that may offer sports wagering and the optimal tax rate to generate the most revenue for Kentucky.” The working group will meet again on Wednesday, August 22.
