How $500,000 Kentucky Sportsbook Licensing Fee Compares To Rest Of US

Written By Dan Holmes on April 18, 2023 - Last Updated on July 27, 2023
How $500,000 Kentucky sportsbook licensing fee compares to rest of US, from

By the end of the year, Kentuckians will be able to bet on sports.

When Kentucky sports betting launches, operators must pay $500,000 for a license. It’s technically one of the largest licensing fees in the US, but it’s quite cheap compared to some of the most expensive states.

At the end of March, Gov. Andy Beshear signed sports betting legislation, allowing retail and online sports betting in the Bluegrass State. The bill allowed the state’s nine horse racetracks and the Kentucky Speedway to run brick-and-mortar sportsbooks.

Until the launch, the Kentucky Horse Racing Commission will formulate a regulatory framework for the new industry. Lawmakers estimate the state could generate as much as $23 million in new annual revenue from tax revenue and licensing fees.

Kentucky to generate at least $5 million from licensing fees

All 10 properties likely want to operate a sportsbook. As a result, the state government will receive at least $5 million from licensing fees alone during the betting’s first year.

Additionally, those 10 operators can partner with up to three companies for online sports betting in Kentucky. Those partners will be forced to cough up $50,000 for a license with a $10,000 annual renewal fee.

Thus, the state could get up to an additional $1.5 million from online sports betting licenses. However, it is extremely unlikely all 30 service provider licenses are awarded.

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In total, 33 other states and Washington, DC already have a legal sports betting market. In all likelihood, Kentucky will be the 35th jurisdiction with legal sportsbooks.

Seven have licensing fees larger than the ones Kentucky operators will face.

New York is the king of licensing fees

When it comes to regulatory costs, every state takes a different approach. Nevada charges operators less than $1,000 to run a sportsbook.

But the Empire State is on the other end of the spectrum. Regulators charged sportsbooks a whopping $25 million for a 10-year license. Moreover, New York imposes an incredibly high 51% tax rate on sports betting revenue.

Pennsylvania charges $10 million for its license. It’s the only other state with a 10-figure license fee. Massachusetts is third on the leaderboard with $5 million. Ohio has a sliding scale for its fees, but is the only other state that charges in the millions.

New York, Pennsylvania, Massachusetts, Tennessee, Louisiana, Arizona and Ohio are the states with licensing fees larger than Kentucky’s.  Washington, DC also charges operators $500,000.

New Jersey is considered the gold standard of sports betting and charges $100,000 for initial licensing fees.

Operators in the Bluegrass State catch a break on renewal fees

Kentucky’s renewal fees are reasonable compared to other states.

For example, Michigan charges $50,000 for the application fee, $100,000 for a five-year license, and $50,000 for an annual renewal fee.

Kentucky also charges a $50,000 annual renewal fee for sports betting licenses. And $10,000 annually for service provider licenses, which are functionally online sports betting licenses.

While Kentucky is charging a similar fee as Michigan, Kentucky’s licenses don’t expire. That’s in stark contrast to Michigan and most other states, which will make operators front the larger upfront cost again down the road.

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Dan Holmes

Dan Holmes is a staff writer for PlayKentucky with plenty of experience under his belt. Dan has written three books about sports and previously worked for the National Baseball Hall of Fame and Major League Baseball. He also has extensive experience covering the launch of sports betting in other states, including Ohio, Massachusetts and Maryland. Currently, Dan is residing in Michigan with his family.

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