Kentucky Sports Betting Gains Little Traction as 2021 Session Concludes

Kentucky Sports Betting Gains Little Traction as 2021 Session Concludes article feature image
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Jamie Squire/Getty Images. Pictured: The wagering windows at Churchill Downs.

A little more than a year ago, Kentucky sports betting legislation had cleared a key legislative committee without opposition and appeared to be one of the nation’s likeliest legalization candidates. Two completed legislative sessions and one generational pandemic later, Kentucky sports betting is still illegal and its future remains bleak.

A 2020 sports betting bill championed by Rep. Adam Koenig (R) cleared a House committee without opposition in January of that year, seemingly clearing a legalization path with bipartisan support. Instead, GOP leadership delayed the bill from a full floor vote.

By the time the pandemic shut down most businesses and the legislature a few months later, sports betting was a relative afterthought, excluded from recalibrated and truncated budget deliberations.

Koenig’s follow-up bill wouldn’t even pass committee. The 2021 session adjourned sine die earlier this week; sports betting legislation supported by Republican lawmakers and a Democratic governor failed in the state best associated with pari-mutuel wagering.

Background on Kentucky Sports Betting

Kentucky seemed like a logical sports betting candidate after the Supreme Court struck down the federal wagering ban in May 2018.

Though it has no brick-and-mortar casinos, the state hosts the nation’s most iconic pari-mutuel horse race. Single-game sports wagering seemed like a logical extension. Neighboring states such as Ohio and West Virginia had permitted their equine facilities — struggling with decades of dwindling attendance — to expand into Las Vegas-style casinos (or “racinos”), reaping millions more in annual revenues from the new gaming options.

In Kentucky, casino expansion has remained a political dead end. Though Democratic Gov. Andy Beshear championed casinos in his 2019 gubernatorial campaign, no legalization bills have gained any traction.

Sports betting, backers such as Koenig believed, could be different. Sportsbooks were a natural complement to Churchill Downs and the state’s other venerable horse tracks and could be a way to keep Kentuckians from placing bets in the growing number of neighboring states with legal wagering.

These financial arguments, along with Beshear’s endorsement, helped fiscally-oriented Republicans as well as Democrats support Koenig’s 2020 House sports betting bill with minimal opposition. The resounding support at the committee level in January seemed to foreshadow an eminent — and successful — vote on the full House floor. Instead, conservative political opposition delayed a formal vote for months.

By March, the COVID-19 pandemic effectively killed 2020 hopes. Though Democrats pushed for sports betting as a new revenue generator for a state budget facing dwindling tax revenues and rising healthcare costs exacerbated by the pandemic, it gained little traction in the overwhelmingly Republican General Assembly.

2021 Efforts Fall Short

Koenig and more than a dozen co-sponsors tried again in 2021, but had little time to push sports betting in Kentucky’s shortened, odd-numbered-year session.

Additionally, conservative outside groups had successfully sued to outlaw legal historic horse racing terminals. The Kentucky Supreme Court’s September 2020 decision to ban the games sent lawmakers scrambling to pass new legalization legislation for the games, which act similar to slot machines and generate millions in annual revenues for state horse tracks and government coffers.

This sucked up much of what limited political oxygen existed in Frankfort for 2021 gaming matters. Sports betting backers said sportsbooks could also help boost horse tracks financially, but the new gaming form was a bridge too far for Kentucky conservatives.

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Future Hopes

When policymakers begin the 2022 session next January, Tennessee, West Virginia, Virginia, Illinois, Indiana and possibly Ohio and Missouri could all have legalized statewide mobile wagering. There will also be more time allotted under an even-numbered-year session to build support.

But much of the political obstacles will remain. Kentucky Republicans have supermajority control of both chambers. Anti-gambling and religious groups also hold considerable sway in the GOP caucus, and have worked for decades to thwart, stall and ban all gambling forms.

Beshear’s gambling support could also be a liability. Republican lawmakers have worked to limit the governor’s powers since before he took office. He vetoed more than two-dozen bills this year alone, nearly all of which were overridden by the legislature.

Clashes between the governor and General Assembly Republicans should only heat up as Beshear nears re-election in 2023; the GOP may be even less willing to give the Democratic incumbent a political “win.” Beshear would almost assuredly sign a sports betting bill, but it will become increasingly difficult to get any legislation he supports out of the legislature and onto his desk.

2021 will be remembered by Kentucky sports betting supporters as a step back after a step forward in 2020. It’s far too early to tell how sportsbook legalization will be perceived in 2022, but many of the intrinsic political obstacles will remain in the General Assembly, possibly more entrenched than ever.

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