The Commonwealth of Kentucky took action this week on its sports betting legislation, which also bodes well for online poker and fantasy sports, both of which are included in the bill.
As the bill has been alive for little more than two weeks, it has already garnered substantial bipartisan support from a group of legislators with more names added. It also moved through the first committee, though a proposed amendment indicates some feelings about the poker part of the bill.
It seems that lawmakers are keen on sports betting and fantasy sports, but they don’t believe on wagering on other events like the Oscars, and they are curiously concerned about poker and potential contradictions of Kentucky law with federal law. Considering Kentucky’s past with seizing online gambling domains, however, the amendment to the current gambling bill makes more sense.
While Kentucky seems determined to legalize sports betting and DFS, it is unclear if and how online poker will remain a part of the package.
Bill Movement Thus Far
The bill in the Kentucky House – HB.175 – was first introduced on February 5, and it was quickly directed to the Licensing, Occupations, and Admin Regs Committee.
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The bipartisan bill originally boasted of 15 cosponsors, four of whom were Democrats and the rest Republicans. Since then, six more members of the House have signed on, all Democrats: Tom Burch, Derrick Graham, Kathy Hinkle, Joni Jenkins, Cherlynn Stevenson, and Buddy Wheatley. It should be noted that Jenkins is the Minority Whip in the House, and fellow co-sponsor Republican Chad McCoy is the Majority Whip.
On February 20, the bill passed the committee after the first reading without one no vote, though an amendment was added as it was put on the House calendar.
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Significant Bill Changes for Online Poker
The amendment to HB.175, also known as House Committee Substitute 1 includes several changes pertaining to sports betting, fantasy sports betting, and internet poker, all in addition to the wording that already exists.
Pertaining to online poker, these phrases were added:
--to ensure that online poker games are conducted in conformance with federal law--that proposed vendors have not previously violated the Unlawful Internet Gambling Enforcement Act--that licensure does not absolve a person from liability incurred due to litigation with the Commonwealth over internet poker
First, this likely means that any implementation of online poker, including setting regulations and accepting applications, will be on hold until the recent Wire Act decision plays out in federal court or new Attorney General William Barr clarifies an official stance on that Department of Justice decision.
Second, any online poker operator who was caught up in the gambling domain seizures of 2008 and the years of court cases that followed may not be eligible for a Kentucky internet poker license. This would most likely affect PokerStars and The Stars Group, though they did win the latest round of battles in the Court of Appeals last year, and it is unclear how this HB.175 amendment will be interpreted.
Obstacles Facing the Bill
The bipartisan nature of HB.175 is positive, as is the support of Kentucky Attorney General Andy Beshear, who requested such a bill in November 2018. Many in the legislature agree that the revenue from sports betting, DFS, and online poker will be beneficial for the state and resolving a public pension funding problem.
According to Commonwealth Economics, the state could accrue up to $48 million per year in taxes from the gambling expansions in HB.175, as Kentucky will be one of the few states in the area to offer legal sports betting, fantasy sports, and internet poker.
The House will have to pass the bill with at least 60 votes out of 100 members because the legislation pertains to raising and spending money. Support for the bill is bipartisan, but opposition is, too.
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According to the Associated Press, The Family Foundation is one of the groups lobbying against the bill, alleging that Kentucky families will suffer because they’re the ones that will contribute to the gambling industry. Executive Director Kent Ostrander said, “The state should cause families to thrive, not prey on them for revenue.”
Republican Representative Chris Fugate, also a pastor, is one of the opposing members. “I hope it fails,” he said.
Democratic Representative Al Gentry, on the other hand, feels the bill doesn’t go far enough to expand gambling in Kentucky, though he didn’t indicate that he would vote against it.
As for bill sponsor Republican Representative Adam Koenig, he is not sure if there are enough votes to pass the bill. “I don’t know yet, to be honest.”
There isn’t much time to figure it out, though. The Kentucky legislative session is already in its second phase, which only offers a few more weeks of possibilities. The legislature will be out of session on March 8 and 11, and the veto recess begins on March 14. If nothing happens before that recess, there will only be two more days – March 28 and 29 – remaining to pass the bill.
