It was an unexpected surprise to see Kentucky on the list of states considering online poker in 2019. Few could imagine that a state in the middle of America would be the fifth or sixth state to legalize online poker, but imagine no more. The bill is no longer alive for consideration.
Those familiar with the history of Kentucky with online gaming were even more shocked to see the bill proposed in 2019. Not only was the legalization of online poker encouraged by Kentucky Attorney General Andy Beshear – the son of former Kentucky Governor Steve Beshear – but the case that his father brought against more than 140 online gambling websites by seizing their domains in 2008 continued through to the end of 2018 when the Kentucky Court of Appeals finally ruled in favor of PokerStars for $870 million. Needless to say, Kentucky has had a bit of a contentious relationship with online poker and gaming operators.
Of course, if Kentucky legalizes online poker, most operators would have no problem applying for a license to operate within the state, but the history of it all makes it quite interesting.
That, however, is neither here nor there at this point, as the bill to legalize online poker and sports betting did not make it very far in 2019 and won’t be considered again until 2020, at the earliest.
Solid Start Fell Apart
The bill of note in Kentucky was HB.175, “an act related to wagering and making an appropriation therefor.” It was introduced on February 5 and sent to the Licensing, Occupations, and Admin Regs Committee.
The move to legalize and regulate fantasy sports contests, sports wagering at race tracks, and online poker was urged by Attorney General Beshear in late 2018 as a way to increase state revenue to help with a pension funding problem. Instead of raising taxes for the people of Kentucky, Beshear proposed that legislation be passed in 2019 to create a new revenue stream.
That led to a bipartisan group of 15 members of the Kentucky legislature drafting HB.175, and the number of sponsors grew to 21 in the weeks that followed its introduction.
Little more than two weeks after the bill appeared, it passed the committee with only one vote against it. State Representative Adam Koenig added an amendment to the bill, which included some changes to the original wording, such as ensuring that online poker conforms with federal law, that vendors applying for licenses have never violated the Unlawful Internet Gambling Enforcement Act (UIGEA), and that licensed operators can still be held liable for results of litigation with the state over internet poker. The last change was likely to ensure that should Kentucky take PokerStars to the State Supreme Court and win, PokerStars would have to pay the $870 million even if it is operating online poker in the state.
https://twitter.com/brianpempus/status/1098228976902914049
The bill was posted for passage on February 25, and the floor amendment was filed on March 5.
After that, there was nothing more regarding actions for the bill.
Deadlines Hurt
HB.175 may have had a chance for further consideration if the deadlines weren’t so tight. The Kentucky legislative sessions are relatively short, putting the veto recess in motion on March 14. And the final two days of any possible action were March 28-29, during which nothing happened for this gambling bill.
According to US Bets, Koenig knew weeks ago that the bill was likely dead. He noted that the supermajority of votes (60 of the 100 members) needed to pass a bill in the House was not going to be possible in such a short period of time. “We will regroup and reload with a better plan to win the hearts and minds of the public next year,” he said. “We will only need a simple majority, and it will be a budget year where that $20-$48 million (in tax revenue) will look a lot more important. I really like the chances next year.”
https://twitter.com/brianpempus/status/1102351566227558400
Of course, the pension problem that Beshear continues to face is unlikely to fix itself by next year, which adds more incentive to pass a bill to increase state revenue. In addition, Beshear is running for the governorship in 2019, so a win for Beshear would likely be helpful for expanded legal gambling in Kentucky.
While online poker is still not legal in Kentucky, many more lawmakers support the measure than ever before. As long as it sits beside daily fantasy sports and sports betting in a piece of legislation, it is quite likely to be considered seriously again in 2020, perhaps with even more intensity than this year.
https://twitter.com/repkoenig/status/1107701090080956416
