Good news racing fans: Kentucky’s sports betting law says it takes effect July 1. But don’t start lining up to bet on baseball or golf just yet. The Kentucky Horse Racing Commission (KHRC) will create rules and vote on them in a special meeting in July.
If the commission approves in July, the goal is to accept bets at the beginning of the 2023 football season.
Under the sports betting law passed in March, the KHRC will issue licenses to tracks who will partner with vendors, for both retail sportsbooks and online versions.
The partnering has already begun. Keeneland and The Red Mile in Lexington will partner with Caesars Sportsbook. Churchill Downs has been working with FanDuel and DraftKings in various capacities. And yes, the tracks get a cut of the online betting.
Did we mention the part about the horse racing tracks and operators forming an alliance?
KHRC Chairman Jonathan Rabinowitz said commission reps have received tips from various states, and Major League Baseball, in the art of crafting Kentucky’s rules.
“Meetings with state regulators in Massachusetts, Indiana, New Jersey, Ohio and Colorado have provided valuable insight into best practices,” he told WDRB. “Many of these regulators have recently rolled out sports wagering in their states in providing tips learned from real world experience. Meetings with service providers and visits to multiple sportsbook sites provided a look at the extensive technologies employed to protect the integrity of wagering.”
KHRC is hiring 14 new positions for sports betting. They range from leadership to investigation, analytical and administrative.
Vermont is going through the same process of approving a regulatory scheme, but in a different fashion. Neighboring New Hampshire granted DraftKings a monopoly in both retail and online wagers in exchange for a 51 percent cut of the revenue.
The plan is to have wagering live by the end of this year.
Division of Lottery Commissioner Wendy Knight said revenue represents only one of three keys the agency will look at.
“It’s been the intention all along to have competition. The sports betting committee recommended that, the governor talked about that, and the legislature wants that,” Knight told Sports Handle. “The legislature was really clear, that maximizing revenue is not the top priority. … It’s consumer protections and moving off the illicit market.”
Knight’s agency has created a request for proposals for operators who wish to win one of the six licenses up for grabs. The Division of Lottery Board of Directors approved the evaluation criteria that will be included in the RFP and plans to approve the “enhanced procedures” that will also be included at a July 17 meeting.
A public comment period closes July 14.
The legislation permits a single operator but only if all others can’t meet the criteria.
Another interesting approach: the legislature did not set a firm revenue-share rate. Instead operators will state the bid they believe works with a minimum of 20 percent. Of 39 jurisdictions, eight have rates above 20 percent.
Knight expects the RFP to be open for bids by the end of July. Applicants will be judged on responsible gambling programs, integrity, ethics, compliance history, strength of sports betting program, and more. The higher the share, the more points.
“I think the message I got loud and clear is to make sure you put the intent and framework into statute, and you have as much flexibility in regulation as possible,” Knight told Sports Handle.
