An advertisement for sports betting at a casino in Mississippi, which has legalized such wagering.

A bill that would legalize and regulate wagering on sporting events in Kentucky and earmark tax revenue to the state pension system easily passed through a legislative committee Wednesday morning.

House Bill 175 would allow Kentuckians to bet on sporting events at licensed horse tracks, where they could also download a mobile app on their phones that could be used to bet on such events anywhere else in the state. The bill would also set up a regulatory framework for residents to legally play online poker and fantasy sports contests, with the state receiving revenue from taxes, registration fees and licensing fees.

The push for this legislation was spurred by the Supreme Court of the United States ruling last May that struck down the national ban on sports wagering, as eight states have passed new laws to legalize, regulate and tax such betting since that time.

The bill passed out of the House Licensing, Occupations & Administrative Regulations Committee with no dissenting votes and will now go to the full House.

Sports wagering would go under the exclusive jurisdiction of the Kentucky Horse Racing Commission in HB 175, with only horse racing tracks and the Kentucky Speedway eligible to receive a license after paying a $500,000 fee. Sports wagering on the property of these facilities would be taxed at a rate of 10.25 percent while betting on the app would be taxed at a higher rate of 14.25 percent.

While residents could bet on most sporting events across the world, they would be prohibited from betting on contests involving college teams in Kentucky.

Rep. Adam Koenig, R-
Erlanger

A wagering fund would be established through the new gaming revenue to administer the program, with 5 percent of the remaining funds going to a gambling addiction services program and the rest dedicated to a fund established in 2016 for paying down the state’s underfunded public pension plans.

House Bill 175 has not yet received a fiscal impact statement from the Legislative Research Commission, but a study commissioned by Keeneland — a horse racing track in Lexington — estimated that the taxable revenue on sports wagering alone would create at least $20 million in new tax revenue for Kentucky annually.

Critics of sports wagering have questioned whether such legislation would breed corruption and prey on gambling addicts, while Gov. Matt Bevin has ridiculed the notion of paying for the state’s pension liabilities with revenue from either expanded gambling or marijuana.

Rep. Adam Koenig, R-Erlanger, the lead sponsor of HB 17, has stated that while his bill will not entirely fill the $40 billion hole of the state’s pension systems, “every bit we can find to go to it helps.”

Asked about the prospects of HB 175 in the House — where it also has 20 bipartisan co-sponsors — Koenig told Insider Louisville on Wednesday that he thought it would pass “if members vote their conscience.”

The bill also has the support of Greater Louisville Inc. and the Kentucky Chamber of Commerce.

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Joe Sonka
Joe Sonka is a staff writer at Insider Louisville focusing on government, politics, education and public safety. He is a former news editor and staff writer at LEO Weekly and has also freelanced for The Nation and ThinkProgress. He has won first place awards from the Louisville Metro chapter of the Society of Professional Journalists in the categories of Health Reporting, Enterprise Reporting, Government/Politics, Minority/Women’s Affairs Reporting, Continuing Coverage and Best Blog. Email him at [email protected]