Kentucky state Representative Thomas Huff has introduced House Bill 33 (HB33), a proposal to bring land-based and riverboat casinos to the state. The bill outlines a framework for regulating casinos and fantasy sports under the oversight of the Kentucky Horse Racing and Gaming Corporation (KHRGC).
Key Components of HB33
HB33 aims to expand Kentucky’s gambling industry beyond historical horse racing (HHR) machines by allowing traditional casinos in eligible counties. The bill includes provisions for a 21% tax on casino revenue, one of the higher rates compared to other states, and requires casinos to charge a $3 admission fee per patron, which would further boost operator revenue.
Eligibility and Approval Process
Eligibility and Approval ProcessCounties must meet specific criteria to host a casino:
- Population Requirement: Counties must have at least 30,000 residents, unless they already have a horse racing facility, in which case the population threshold does not apply.
- Referendum Process: Counties can hold a voter referendum by:
- Collecting signatures equal to 25% of the voting population from the previous election cycle through a countywide petition.
- Passing a local ordinance to initiate the referendum.
- Multi-County Coalitions: Smaller counties with fewer than 30,000 residents can join neighboring counties to form a coalition meeting the population threshold.
For counties with existing horse racing facilities, like Kentucky Downs in Simpson County, gaming expansions to include casino activities can be approved through a referendum without needing a petition.
Licensing and Bidding
The bill establishes a competitive bidding process for casino licenses:
- Minimum Bid Fees:
- $750,000 for land-based casinos.
- $550,000 for riverboat casinos.
- Licensing bids are ranked based on the amount offered, with priority given to the highest bidder.
- Existing horse racing facilities can submit bids within two days of the bidding deadline, provided they exceed the highest bid by 8% and match the amenities proposed by other bidders.
Fantasy Sports Regulation
HB33 also addresses fantasy sports, proposing:
- A $5,000 annual licensing fee or 6% of annual revenue, whichever is higher, for operators.
- A ban on college sports contests.
- A minimum age of 18 for participants.
Potential Revenue and Challenges
The proposal comes as Kentucky explores new revenue streams to address budgetary needs, including its underfunded pension system, which is only 24.8% funded as of 2024. While sports betting taxes have contributed $34.8 million to the pension fund since legalization in 2023, additional funding is needed.
However, the bill’s provisions, such as the high tax rate and admission fee, may face resistance. Traditionally, Kentucky has been cautious about gambling expansion, although recent years have seen shifts in public and legislative sentiment.
A Step Toward Modernization
If passed, HB33 would mark a significant evolution in Kentucky’s gambling landscape, moving the state toward a regulated casino market. With local voter referendums empowering communities to decide, the bill offers a balanced approach to expanding gaming while addressing economic needs.
HB33 was introduced in the House earlier this week and is set to be debated in the 2025 legislative session.
Source:
Kentucky lawmaker files bill to bring casinos to state, but bidders should pony up, iGaming Business, January 9, 2025.
