FAQ: How will legalized sports betting work in Kentucky, and when will it start?

Frequently asked questions about legalized sports betting in Kentucky:

Q: When did sports gambling become legal in Kentucky?

A: The Kentucky legislate passed HB551, which included legalizing sports betting in the state, on the final day of its 30-day 2023 session. Gov. Andy Beshear signed the bill into law on March 31. The law took effect on June 28, but the betting apparatus is not yet in place.

Kentucky is the 37th state with legalized sports gambling since the United States Supreme Court struck down the federal ban on state authorization of sports betting in 2018.

Q: Who sponsored the Kentucky sports gambling legislation?

A: Republican Michael Meredith sponsored HB551. In the past, Republican Adam Koenig had proposed bills legalizing sports gambling. Those bills never made to the floor for a vote.

Q: Was there opposition?

A: Yes, the bill passed 25-12 in the Senate. In debate, Republican Senator Whitney Westerfield pointed to the addictive nature of gambling, saying, “Ask yourselves, how much money people of Kentucky have to lose before we get that?”

Q: Who will oversee sports gambling in Kentucky?

A: The Kentucky Horse Racing Commission is in charge of setting rules and regulations. It has up to six months after June 28 to set those guidelines but said it will hold a meeting in early July to discuss implementation.

Q: When will sports gambling launch in Kentucky?

A: The hope is that sports gambling will be in place in the time for the NFL season, which starts Sept. 7.

Q: How will bettors be able to wager on sports?

A: There will be two options. You can wager on a sportsbook app that is affiliated with one of the state’s nine horse racing licenses. Or you can wager in-person at one of the tracks or a satellite facility of the track.

Q: Which tracks have racing licenses in Kentucky?

A: Churchill Downs, Keeneland, Kentucky Downs, Ellis Park, Red Mile, Turfway Park, Oak Grove, Cumberland Run and Sandy Ridge. Cumberland Run and Sandy Ridge have not yet opened.

Q: How much are the Kentucky sports betting license fees?

A: Tracks must pay an initial $500,000 fee with a $50,000 renewal. Sports betting operators must pay a $50,000 initial fee with a $10,000 renewal.

Q: How many apps could there be?

A: The new law permits up to 27 sports betting apps and nine retail (in-person) sportsbooks. Each facility can partner with up to three sportsbooks apps.

Q: When can patrons sign up for the betting apps?

A: When Kentucky sports betting officially launches. Sportsbooks are expected to offer incentives and bonuses for new sign-ups.

Q: Who is Keeneland’s sports betting partner?

A: Keeneland and Red Mile are partnering with Caesars Sportsbook.

Q: Does Churchill Downs have a sports betting partner?

A: Churchill Downs Incorporated is reportedly striking a deal with FanDuel, but it might also add other betting partners.

Q: Where can I place an in-person bet in Lexington?

A: There will be a sports betting facility inside the old clubhouse at Red Mile.

Q: Can I place an in-person sports bet at Keeneland?

A: There are no plans for an in-person sportsbook at Keeneland, though one could be added in the future.

Q: How old must I be to place a legal sports bet in Kentucky?

A: Sports betting is limited to 18 and over, though venues might require you to be 21 to enter the facility.

Q: Will I be able to wager on college sports?

A: Yes, Kentuckians will be able to wager on college sports. High school sports are banned from sports wagering.

Q: Will Rupp Arena have a place to bet?

A: No. At present, the law calls for in-person betting venues to be affiliated with the state’s racetracks or satellite facilities.

Q: What are the most common sportsbook bets?

A: Moneylines, parlays, totals, point spreads, futures, prop bets and live bets during events will all be allowed, as well as others.

Q: Will online poker and daily fantasy sports be legal in Kentucky?

A: Unlike previous bills, HB551 did not include online poker or daily fantasy sports wagering.

Q: What will happen to the Keeneland Select app?

A: The Keeneland Select app will continue as horse racing betting is considered separate from sports betting.

Q: Can you bet horse racing on the sports gambling apps?

A: Sports gambling apps will only be available for sports bets, not horse racing bets.

Q: How much money will Kentucky make in tax revenue from sports gambling.

A: The original estimate was $23 million. Kentucky Senate Majority Floor Leader Damon Thayer has said he believes the numbers will be larger than what economists predict.

Q: What is the tax rate for sports gambling in Kentucky?

A: The tax rate for online sportsbooks will be 14.25%. The tax rate for retail sportsbook will be 9.7% of gross gaming revenue.

Q: How does that tax rate compare to neighboring states?

A: Ohio imposes a 10% tax rate on betting apps. Tennessee just changed its tax rate on sports betting from 20% of the adjusted gross revenue to a $1.85% tax on an operator’s handle.

Q: How will individual Kentuckians be taxed?

A: Kentuckians will be required to pay taxes on all winnings from sportsbooks, minus the losses from sports gambling. If you win more than $600 at an online sportsbook, you will be issued a W2-G form or a 1099-Misc. form with a copy automatically going to the IRS.

Q: What if the bettor wins big on an individual bet?

A: If the bettor wins more than $5,000 on a wager and the payout is 300 times your bet amount (or more), the sportsbook can withhold 24% of your winnings for federal income tax purposes.

Q: How will the state tax money off sports gambling be used?

A: A small portion will be used to help those with gambling problems, with the vast majority of the money going to the state’s permanent pension fund.

Q: How is sports gambling going in Ohio?

A: Ohio broke the all-time record for monthly sports volume with $1.1 billion bet in January, the first month of its existence. As you might expect, the numbers have dropped. Ohio reported that $520.6 million was wagered in April, a 30% drop from March.

Q: How is the University of Kentucky dealing with the issue of sports gambling?

A: UK Athletics Director Mitch Barnhart said that the department’s compliance officer, Rachel Baker, has a history of working on gambling issues during her time at the NCAA. Given betting scandals at Alabama, as well as Iowa and Iowa State, Barnhart said UK will ramp up the educational process with its student-athletes about potential gambling problems.