Three gambling-related bills passed the Kentucky House of Representatives last week. While there was debate on the House floor, each bill passed by a comfortable margin. All three bills now move on to the Senate. The legislative session ends on April 15.
House Bill 606
Another key hurdle was eclipsed in Kentucky’s quest for legalized sports wagering. Northern Kentucky Rep. Adam Koenig’s House Bill 606, focused on the legalization of sports wagering, has passed the House of Representatives with 58 yays to 30 nays.
“I believe that the people of Kentucky deserve the opportunity to do something they enjoy with the protection and regulations of their governments,” Koenig said.
The bipartisan bill’s primary functions are to legalize and regulate sports wagering, legalize and regulate online poker, and regulate daily fantasy sports. It would implement a 9.75 percent tax on the adjusted gross revenue for in-person betting. There would also be a 14.25 percent tax on the adjusted gross revenue for online sports betting. The money collected from these taxes would go into the state’s pension fund.
House Bill 606 now moves onto the Senate for consideration where leaders in the Republican Senate majority are dubious of the bill’s ability to pass the second chamber.
Koenig said the state believes they will be able to raise $22.5 million in revenue annually.
“Given how many states have overdone their projections, exceeded their projections. I think $22.5 million is probably a minimum,” Koenig said.
While House Bill 606 passed with a comfortable majority, many representatives expressed their concern or disapproval after the vote was tallied.
Louisville Rep. David Hale, who voted no, voiced his concern over how the potential implementation of this bill into law would harm vulnerable Kentuckians.
“I do not feel we need to go down this path if the purpose is to generate revenue. I do not think this is going to generate enough revenue as to what this is going to cost some of our most vulnerable people in this state,” Hale said. “I think the fact is out there that people will wager. We know that. I know that. Everybody in here knows that. I think that it hurts some of our most vulnerable citizens in the state that can not afford the losses that they incur from this. I think this encourages more expanded gambling in the state.”
An amendment introduced by Irvington Rep. Josh Calloway, which would set an $1,000 limit on how much an online bettor could lose in a 24-hour period, failed by a voice vote.
House Bill 607
House Bill 607, which would modernize pari-mutuel gaming, passed the House unanimously.
The measure would adjust the tax structure on horse betting and pari-mutuel betting, which is a form of betting in which those backing the first three places divide the losers’ stakes. There’s a 1.5 percent tax proposed for all pari-mutuel wagering, which includes advance deposit wagering, simulcast bets, and historical horse racing.
House Bill 607 would also require the Kentucky Horse Racing Commission to self-fund with revenue from historical horse racing. The Thoroughbred Development Fund would be capped at $40 million. Standardbreds would be capped at $20 million. This measure reduces the overall amount going into these funds, providing more money for the state’s General Fund.
House Bill 608
House Bill 608, sponsored by Lexington Rep. Killian Timoney, also passed the House with a 50 yay to 31 nay vote. The bill would ban gray machines, or machine skill games not authorized by the racing commission, lottery, or charitable gaming. Gray machine developers describe them as skill games, not necessarily slot machines.
Proponents of the bill, such as its sponsor Rep. Timoney argues the gray machines are taking funding away from other public gaming groups such as the Kentucky Lottery. Mary Harville, CEO of the Kentucky Lottery, voiced her opposition to the gray machines last week in a committee meeting.
Timoney said that the bill’s purpose was to ban and prohibit any of the gambling devices that fall outside of the purview of certain regulatory statutes, authorization for the Kentucky State Police to establish a task force dedicated to removing gambling devices not authorized under the law, and to direct the Justice & Public Safety Cabinet to promulgate regulations regarding the task force.
There was debate on the House floor regarding how the banning of gray machines would negatively impact small businesses such as convenience stores, who rely on the gray machines for foot traffic.
Rep. Chris Fugate of Chavies voted yay on the bill, but expressed reluctance for his vote due to his moral opposition to gambling of any form. Fugate argued some of his Republican colleagues were protecting the interests of large corporate gambling operations, while going after smaller operations who rely on gray machine revenue for their businesses.
“This bill is obviously an HHR, Lottery-backed bill. I’m amazed that those who asked us to vote for gambling last year would ask us to vote against gambling this year,” Fugate said.
Rep. Josh Bray of Mt. Vernon also expressed reluctance for his yay vote, while pointing out the negative impact gambling has on vulnerable Kentuckians.
“I come from a poor part of the state,” Bray said. “I don’t like telling people what they can or can’t do with their money, but at the same time, sitting at a “gray machine” at a gas station feeding it quarters or dollars all day, when you’ve got kids at home going hungry, I’ve got a problem with that.”
