At long last, the Kentucky Horse Racing Commission will publicly discuss regulations for sports betting in Kentucky.
The KHRC’s meeting on Tuesday marks the first time the commission will meet since April 18, which was just a few weeks after Gov. Andy Beshear signed HB 551 into law, officially legalizing Kentucky sports betting. Commissioners didn’t have much to talk about so early in the process.
Now, nearly three months into pre-launch regulation-building, the KHRC will surely spend a significant chunk of its June 20 meeting discussing any and all updates regarding the soon-to-go-live sports betting industry in Kentucky.
And we know the commission has been hard at work, with Beshear and Sen. Damon Thayer both saying they expect sportsbooks to launch around football season.
So, what exactly can we expect to hear during this meeting?
PlayKentucky has an idea of the topics and revelations we may learn about on Tuesday.
Regulations on advertising, promo language
Commissioners could touch on a wide range of regulations during Tuesday’s meeting, but two of the most buzzing topics nationally are advertising and promo language. And they really go hand-in-hand.
Regarding promo language, the KHRC will almost surely write language that prohibits sportsbooks from using free, risk-free or any wording that suggests a bonus has no risk for the bettor or that suggests the bonus is free. This restriction has become commonplace in the US sports betting industry. It would frankly be shocking if Kentucky didn’t follow suit.
The Kentucky sports betting bill did not make any specifications regarding sportsbook advertising. So, regulators may discuss any of the following pressure points:
- Preventing ads from reaching underage audiences.
- Potential restrictions on airing commercials surrounding game broadcasts.
- Limitations on the amount of sports betting ads per operator.
Launch timeline
When will sports betting in Kentucky launch? That’s really what everyone tuning into Tuesday’s meeting will care about.
We’ve heard Beshear and Thayer say, based on conversations with KHRC Chair Jonathan Rabinowitz, a launch before or during NFL season is realistic. Now, we’ll be able to hear directly from the horse’s mouth, so to speak. The industry must launch by Dec. 28. The NFL season kicks off Sept. 7.
Will the commission set forth a launch target? Or perhaps a range of dates?
Will they establish that retail sportsbooks will go live before mobile apps? Or is the goal for everything to launch together?
Intersted operators
So far, Caesars is the only confirmed operator set to launch in Kentucky after partnering with Keeneland and Red Mile.
News on other sportsbooks joining the fray has been surprisingly quiet, although negotiations are surely going behind closed doors. Perhaps the negative press Churchill Downs is facing related to its recent string of horse deaths is causing a delay in a partnership announcement.
You can be sure BetMGM Kentucky, DraftKings Kentucky and FanDuel Kentucky will all exist when the industry launches. We also believe Bet365 Kentucky is a solid bet.
There’s a chance KHRC commissioners may discuss which operators have expressed interest in applying for licenses in the state.
There are 30 online operator licenses up for grabs (three per each of the nine Kentucky horse racetracks and three for the Kentucky Speedway). Plus, 10 retail licenses for those 10 venues.
Application process
The bill legalizing sports betting in Kentucky really didn’t mention anything about the license application process, other than that it would cost $500,000 to apply for one. It leaves the details up to the KHRC.
Interested operators in other states have needed to submit detailed financial reports, responsible gambling measures, internal controls analyses and much more. Don’t expect that burden to be any less in Kentucky.
Regulators in other states have also contracted with outside agencies to help conduct background checks and investigations for technical aspects of a thoroughly vetted license review. Perhaps the KHRC will name specific agencies it will choose to work with.
Responsible gambling measures — especially with 18+ betting
This topic is similar to the discussion on sportsbook advertisements and promo language.
Kentucky’s sports betting bill established that 2.5% of tax revenue will go to a newly created fund that will specifically address problem gambling prevention. Might commissioners share more details of this fund and what specifically it will pay for?
The KHRC could also touch on specific responsible gambling measures they’ll require of sportsbooks in Kentucky. This is an especially important topic in Kentucky, where 18 will be the legal age limit for sports betting. That opens a can of worms for a myriad of potential responsible gambling issues, including ones involving student-athletes at Kentucky universities.
If there’s an area where the KHRC might be smart to over-regulate, it’s responsible gambling — specifically dictating how sportsbooks can and cannot promote their products on or around college campuses.
Promo credit tax write-offs
This ultimately could be the most impactful topic on this list, at least in terms of finances.
Some states allow sports betting operators to deduct the promotional credits they offer from their state tax filings. For example: If Kentucky followed this model, Caesars Kentucky could write off $2 million for a month’s taxes if it spent $2 million shelling out bonus bets that month.
However, most states nowadays are either restricting promo write-offs (limiting them to a certain percentage of revenue, for instance) or not allowing them altogether (like Massachusetts). The bill says nothing about write-offs, so this will be entirely up to the KHRC.
