When Kentucky Gov. Andy Beshear signed HB 551, the state’s nine horse tracks and the Kentucky Speedway were eligible to receive a sports betting license.
Furthermore, it allowed those 10 venues to partner with up to three companies for online sports betting. In other words, the Kentucky sports betting industry could have up to 30 partnerships.
Beshear signed the sports betting bill into law at the end of March.
But nearly three months later, only one partnership has been announced.
In mid-May, Caesars partnered with Keeneland and Red Mile, a pair of Lexington horse tracks. Per the agreement, Caesars would operate the brick-and-mortar sportsbook at Red Mile. Additionally, it ensured a Caesars Sportsbook Kentucky platform would be available in the state.
But why haven’t other major operators followed suit?
Kentucky is the only remaining sports betting launch this year. It would be hard to imagine a market where Caesars is available, but none of the other major operators like BetMGM, DraftKings and FanDuel are.
Partnerships are waiting on regulatory clarity
In a statement to PlayKentucky, Kentucky Downs said it was still researching details of potential partnerships. And it wouldn’t make an announcement until the Kentucky Horse Racing Commission, the body overseeing the new industry, released its list of sports betting regulations in July.
“We are in the process of doing our due diligence before making concrete plans, including awaiting the finalized sports betting regulations in Kentucky,” said the Franklin racetrack in a statement.
Similarly, Sandy’s Racing and Gaming told PlayKentucky in an exclusive interview it was in the “final negotiations” with its partner.
The language in HB 551 laid out certain rules for sports betting in Kentucky. It cemented the tax rates, how many licenses would be available and the age requirement for sports betting.
However, aside from those few details, a lot is still up in the air.
Regulatory framework could affect profitability
For example, the KHRC still has to decide which rules will be implemented about sportsbook advertising. And whether regulators will allow sportsbooks to write off promotional spending on their taxes.
Those decisions could affect how profitable a Kentucky sportsbook can be. Thus, it’s in the best interest of the racetracks to wait and see the entire picture before making a deal.
These partnerships wouldn’t exist if they weren’t profitable for both. Consequently, even if partnerships are on the brink of being established, there could be a few details to iron out once the rules are clear.
At last week’s KHRC meeting, Chairman Jonathan Rabinowitz said the commissioners spoke with other states’ regulators to discuss best practices. In particular, he mentioned they met with officials from Massachusetts, Indiana, New Jersey, Ohio and Colorado.
From that, we can deduce which rules will be poached from other jurisdictions. But we won’t know for sure until next month.
Expect a flood of partnership announcements in July
Rabinowitz also said the commission would hold a special meeting in early July to approve rules. Kentucky regulators will post them for public comment before the next meeting.
These rules are rarely protested and changed by anyone involved.
Therefore, it’s likely these rules are approved in the next few weeks. Then, we can expect an avalanche of partnerships and a much clearer picture of what Kentucky sports betting will look like.
