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On Monday, Kentucky legislators debating the viability of sports betting were told by gaming lawyer Daniel Wallach that the state’s constitution already has a provision that allows sports betting in the state.
In front of the Interim Joint Committee on Licensing, Occupations and Administrative Regulations, Wallach told lawmakers he had researched gambling in Kentucky as far back as 1890, where members attending the state’s Constitutional Convention at that time had left detailed journals.
Wallach determined through his research that lawmakers at that time were banning games of chance and not games of skill. Sports betting, Wallach told lawmakers, is much like betting on horse racing, a game of chance.
The ban on lotteries in Kentucky was affirmed to not include horse race betting by the Kentucky Court of Appeals in the mid-1900s.
“So the debate over whether sports betting is encompassed within the constitutional ban on lotteries was settled nearly 130 years ago,” Wallach told lawmakers. “That argument is over. The framers considered it and rejected it.”
At the crux of the issue for Kentucky lawmakers is whether they will need to adopt a constitutional amendment first before opening the doors to a vote on a full expansion of sports betting. Lawmakers would like to circumvent a vote of constituents and legalize through the powers afforded to them by the state’s constitution.
Sports betting in Kentucky has already been placed on the fast track after the election of Democrat Andy Beshear. The Governor-elect has been a staunch proponent of expanding betting in Kentucky and with his election, lawmakers have taken the reins in the hope of a quick approval.
The hearing ended with no votes taken by the collective committee of both House and Senate members but the majority leader in the state Senate, Damon Thayer, called Wallach’s testimony, a “mic drop” moment that could give lawmakers the constitutional backing they need to ward off any potential legal challenges.
The hearing with Wallach was initiated by state Rep. Adam Koenig, who has a sports betting measure filed with the House for approval. Koenig’s bill would grant the Kentucky Horse Racing Commission (KHRC) the regulatory oversight for sports betting in the state and any professional sports venue that seats up to 50,000 fans.
The 50,000 seat stipulation would allow the Kentucky Motor Speedway to house their own sportsbook. Laws in Washington D.C. and Illinois are also introducing sports betting to arenas and stadiums.
Koenig’s bill would set the tax rate in a similar zone of New Jersey, around 14.25 percent for online sportsbooks and 9.75 percent at brick-and-mortar gambling establishments. Online betting would require the bettor to first register on-site at either a racetrack or sportsbook before they could place wagers via a mobile app.
One sticking point that could delay the progress of the bill is a prohibition on betting on collegiate teams that reside within the state, but Koenig has suggested that he would be open to dropping the provision.
Koenig’s bill has already passed the House Licensing, Occupations and Administrative Regulations Committee, that the state Rep. chairs, but did not get a floor vote because of a rule that requires fiscal regulation to get 60 votes in odd-numbered years.
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