Since the year began, several US states had discussed the possibility of legalizing sports betting through their respective legislative houses. But by March 31, Kentucky beat all other states to it after its governor, Andy Beshear, signed the sports betting bill into law. However, that victory doesn’t seem sufficient for Governor Beshear, a longtime supporter of legal sports betting.
In a recent weekly news conference with Kentucky TV reporters, Governor Beshear stated that he was planning to get sportsbooks running in time for the new NFL season. He was quoted to have said:
“The people are really excited about this, so we want to get it up and going as quickly as we can but also to do it right.”
Interestingly, it appears that the governor is not the only one in a haste, as the Kentucky Horse Racing Commission also hinted that it was already preparing sports betting regulations. The sports betting law becomes operative by June, and the Commission expects that all regulatory procedures will be put in place by then.
Stakeholders Fear that Governor’s Proposed Launch Too Hasty
Many have faulted the governor’s push as too sudden, but others do see the possibility. The law stipulates that sports betting in the state should be fully functional six months after the effective date.
This rule puts January 2024 as the latest date for the launch of sportsbooks in Kentucky. Over the years, it’s been fairly common to see sports betting facilities kick off operations in the first month of the year, with common examples being Michigan and Ohio.
Should Governor Beshear have sportsbooks functional by the NFL season start date of September 7, this will make the state one of the fastest to implement its legal wagering laws. In 2022, Kansas launched its first sportsbooks in September, barely four months after Governor Kelly signed the sports betting bill into law. Similarly, Arizona only had a five-month gap between its legislation and its first sportsbook bet.
However, if the Kentucky Horse Racing Commission takes the maximum time required to set up, the sportsbook will still be ready for operation in time for the Big Game in February.
Super Bowl LVIII is set to take place on February 11, 2024, with plans for the launch of sportsbooks in Kentucky expected to be completed at least a month before that date.
Financial Expectations for Kentucky Sports Betting
It is quite understandable why Governor Beshear wants sports betting to get underway quickly. Kentucky is bordered by six states that have all legalized sports betting, including Ohio, Illinois, West Virginia, and Tennessee. The other two states are Indiana and Virginia, and it is highly unlikely that Kentucky would like to have its players crossing state borders to place NFL bets elsewhere.
Sports betting in the state is also expected to bring in additional revenue. Sports betting facilities will be licensed as part of horse racing tracks.
As it stands, there are nine horse racing tracks in Kentucky, and each one is allowed to operate an in-person sportsbook. A horse racing track is also permitted to collaborate with up to three online sports betting brands.
What Fees Will Kentucky Sportsbooks Have to Pay?
Licensing of in-person sportsbook facilities will cost an upfront fee of $500,000, while renewal will cost $50,000. Online operators will pay a licensing fee of $50,000 in their first year and $10,000 for annual renewal. Retail sportsbooks are expected to be taxed at 9.75%, while online sports betting operators will be taxed at 14.25% on their revenue.
Besides, there are about 27 sportsbook operators in the US, and three operators with the largest market share already have a strong presence in Kentucky. With all of these metrics in place, it is projected that Kentucky sports betting may pool $23 million in annual revenue.
From all indicators, getting sports betting facilities up and running quickly is a profitable risk the Kentucky state government is willing to take.
