Bill to legalize sports wagering clears Kentucky House

FRANKFORT, Ky. -- A bill to legalize sports betting in Kentucky won House passage Monday, setting up a Senate showdown on a proposal that creates divisions among the Republican supermajorities.

Past efforts to legalize sports wagering in the Bluegrass State garnered House support but died in the Senate. It's a reflection of how divisive the gambling issue is in the state that's home to Churchill Downs in Louisville, where the Kentucky Derby is run.

"This does create a regulated marketplace for sports wagering, taking sports wagering in Kentucky out of the shadows, out of the darkness and moving it into the light," said Republican Rep. Michael Meredith, the bill's lead sponsor.

The measure cleared the House on a 63-34 vote, but its prospects in the Senate are uncertain, with a higher procedural hurdle for supporters to overcome this year. It needs a three-fifths vote in each chamber to pass, since it's a revenue-producing bill in an odd-numbered year.

Opponents dug in for the looming fight in the Senate. After the House vote, The Family Foundation said the sports wagering bill represents "a massive expansion of predatory gambling at a time when Kentuckians can least afford it."

A key supporter of the bill, Senate Majority floor leader Damon Thayer, said later Monday that it's "going to be tough" to reach that higher threshold in the Senate.

"But first thing's first, I want to try to get it out of committee," Thayer said in an interview.

After several years of coming up short, supporters said it's time for Kentucky to accept a form of wagering already available in most of Kentucky's neighboring states.

"You literally just have to drive across the county line or cross the river to go take part in their programs." Meredith said.

The bill's opponents said state-sanctioned sports wagering would create more social problems that hurt families. Republican Rep. Chris Fugate said: "This is not legislation that Kentucky can be proud of."

"This is not good for Kentucky," he said. "It's not good for families. It's not good for people. And I really hope and pray we get to see some legislation that will bring jobs into east Kentucky and to the rural parts of this state."

If legalized, sports wagering in Kentucky is expected to generate about $23 million a year in tax revenue, Meredith said.

House Bill 551 would allow Kentucky's horse racing tracks to be licensed as sports betting facilities for a $500,000 upfront fee and an annual renewal fee of $50,000. Participating tracks could contract with up to three service providers to provide sports wagering services at the track itself, or through online sites and mobile applications. Service providers would have to pay $50,000 for an initial license, with a $10,000 annual renewal fee.

Under the bill, the Kentucky Horse Racing Commission would regulate sports wagering operations. Revenue generated from taxing such wagering would cover those regulatory costs. A percentage of the revenue would go into a fund focused on dealing with problem gambling. The leftover revenue after that would flow into the state public pension system.