Kentucky lawmakers advance bill to legalize sports wagering

FRANKFORT, Ky. (AP) — Supporters of legalizing sports wagering in Kentucky cleared a first hurdle Wednesday, winning approval from a House panel in their latest quest to regulate and tax the activity.

Republican Rep. Michael Meredith, the bill’s lead sponsor, said it’s aimed at “taking an industry that exists in darkness and in the shadows and legitimizing it, legalizing it and regulating it.”

The measure won strong bipartisan support in sailing through the House Licensing, Occupations and Administrative Regulations Committee. It represented the bill’s first sign of progress, coming on the 22nd day of this year’s 30-day legislative session.

Past efforts to legalize sports betting in the Bluegrass State garnered House support but died in the Senate. It’s a reflection of how divisive gambling is in the state that’s home to Churchill Downs, where the Kentucky Derby is run. Republicans have supermajorities in both chambers.

David Walls, executive director of The Family Foundation, spoke out against the measure during the committee hearing Wednesday. He warned that state-sanctioned sports wagering would create more social problems by draining money from families.

“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.

Meredith stressed that his bill would regulate an activity that’s firmly entrenched in Kentucky. He pointed to estimates that Kentuckians place around $1 billion in sports wagers each year in what he called the “illegal, unregulated market.”

If legalized, sports wagering in Kentucky is expected to generate about $23 million a year in tax revenue, Meredith said. While it’s a small amount compared to other revenue sources, it’s “$23 million that’s either not being given to any government right now or being given to one of our border states” where sports wagering already is legal, he said.

House Bill 551 would allow Kentucky’s horse racing tracks to be licensed as sports betting facilities for a $500,000 upfront fee and an annual renewal fee of $50,000. Participating tracks could contract with up to three service providers to provide sports wagering services at the track itself, or through online sites and mobile applications. Service providers would have to pay $50,000 for an initial license, with a $10,000 annual renewal fee.

Under the bill, the Kentucky Horse Racing Commission would regulate sports wagering operations. Revenue generated from taxing such wagering would cover those regulatory costs. The leftover revenue would flow into the state public pension system.

The bill faces a higher procedural hurdle to overcome this year. It needs a three-fifths vote in each chamber to pass, since it’s a revenue-producing bill in an odd-numbered year.

That presents a “challenging threshold” if the bill reaches the Senate, Senate Majority Floor Leader Damon Thayer said Wednesday. But the Republican leader added that “I am going to try,” predicting that the sports wagering proposal has picked up more support in the chamber.

Bruce Schreiner, The Associated Press