Kentucky Governor Vetoes Bill to Rein in Sports Betting

Governor Andy Beshear’s concerns over proposed changes to Kentucky’s sports betting market were brushed aside this week.

The state legislature had passed HB 904 on April 1, sending it to the Governor the following day. After reviewing the bill for over a week, Beshear issued a veto, sending it back to the House. Both chambers were able to easily override the veto yesterday, thanks to Kentucky law, which requires only a simple majority.

The bill is now with the Secretary of State’s office, where its proposals will officially become law.

While the bill’s more controversial proposals have been stripped, it will still make the following changes to the state’s sports betting market:

• Raise the minimum betting age from 18 to 21

• Ban on player prop bets involving in-state college athletes

• Allow fixed-odds wagering

In addition to adding new sports betting restrictions, HB 904 also introduces changes to fantasy sports. The industry will now be subject to a 12.5% tax, with operators facing the levy. All games offered on fantasy platforms must involve at least two players, eliminating games against the house.

Originally, the bill proposed to force out sportsbooks that also operate prediction platforms in the US. That would have meant DraftKings, Fanatics, and FanDuel would have had to exit the state’s sports betting market. However, efforts by industry leaders ensured that those stipulations were removed before the bill passed.

Beshear Notes Concern Over Emergency Regulations

The Kentucky Governor’s veto came as a surprise, but his reasoning showed he still supports the main changes proposed in HB 904. Instead, his concern was focused on the bill’s changes to the regulatory process.

In a statement regarding his veto, Beshear pointed out that the bill would grant the Kentucky Lottery Corporation and Kentucky Horse Racing and Gaming Commission the power to enact emergency regulations. While it's meant to help address problems quickly, the Governor fears that the lack of oversight could be abused. 

“Authorizing an agency to file an emergency regulation in this manner would prevent the Governor from carrying out his constitutional duties and allow boards and agencies to impose rules on Kentuckians without executive oversight, including boards whose decisions impact public safety,” Beshear’s statement read.