Bipartisan sports wagering bill advances from House committee
FRANKFORT — This could be the year the Kentucky General Assembly legalizes sports betting in the Commonwealth.
The House Licensing, Occupations and Administrative Regulations Committee unanimously approved House Bill 551 on Wednesday. Rep. Michael Meredith, R-Oakland, and Rep. Al Gentry, D-Louisville, are primary co-sponsors of the bill, which would legalize, regulate and tax sports wagering in Kentucky.
Meredith said even though sports wagering is illegal in the state, Kentuckians are placing about $1 billion in illegal sports wagers annually through online sources. Many Kentuckians are also crossing the state line to participate in sports betting in states where it is legal.
“I’m here to tell you about taking an industry that exists in darkness and in the shadows and legitimizing it, legalizing it and regulating it to protect the consumers of Kentucky,” Meredith said.
Meredith said the Kentucky Horse Racing Commission would oversee and regulate the sports betting industry under HB 551. Only licensed tracks would be permitted to obtain a sports wagering license through the commission.
In addition, HB 551 prohibits several types of people from participating in sports wagering, such as anyone under the age of 18. A person who is participating in a sporting event either as a player, coach, official or owner of a team would also be prohibited from placing a wager on a game or event they’re associated with. Violators would be guilty of a class A misdemeanor. A person who tampers with an outcome of a sporting event would be guilty of a class C felony.
The state would make an estimated $23 million annually off sports wagering, according to Meredith and Gentry, through a 9.75% tax on revenue at tracks and a 14.25% tax on revenue from online wagers.
“(HB 551) will tax, regulate and make (sports wagering) legal and significantly reduce illegal participation in this type of activity,” Gentry said. “And it will also help us pay down our pension liabilities because that’s where the funds will be going to.”
Meredith followed up Gentry’s comments by confirming the funds will first cover the administration costs. The leftover funds will be deposited into the permanent pension fund, he said.
Committee Vice-chair Rep. Tom Smith, R-Corbin, asked Meredith and Gentry about the licensing fees outlined in the bill.
Meredith said a licensed track would pay an upfront $500,000 sports wagering licensing fee and an annual $50,000 renewal fee.
During discussion of the bill, two people signed up to speak against HB 551. David Walls, executive director for The Family Foundation, said the foundation is against the expansion of predatory gambling in Kentucky.
“This type of predatory gambling is designed to prey on human weakness with the government colluding with gambling interests to exploit our fellow Kentuckians,” Walls said, adding the industry is also harmful to children and those with a gambling addiction.
While voting, Rep. Emily Callaway, R-Louisville, said she was voting “yes” on HB 551 because her constituents support sports wagering.
HB 551 will now go before the full House for consideration.