Kentucky’s Online Gambling Push To Renew In 2022

Shutterstock/Aleksandar Stokic

“Insanity is doing the same thing over and over, and expecting different results.”

That cliché, usually misattributed to Albert Einstein, gets trotted out for everything from addiction to poker strategy. However, it might not always be true in politics. Sometimes, the way to get a piece of legislation through is just to keep putting it on the table until the stars align.

This appears to be the hope of Rep. Adam Koenig, the gambling expansion’s main champion in the Kentucky legislature. In a tweet yesterday, he signaled the impending reintroduction of his sports betting legislation.

Koenig quoted a tweet from the Kentucky Chamber of Commerce, which cited a poll showing that nearly two-thirds of Kentucky voters are in favor of sports betting. To this, he added:

“The time has come to #makeKY34”

That hashtag refers to the fact that 33 other states have already legalized sports betting in some form.

Koenig has already tried to pass such a bill in 2019, 2020 and 2021. Each effort ended in failure, with last year’s dying very quickly due to COVID and other headwinds.

Assuming this year’s bill is similar to the previous ones – and indications are that it will be – it may include regulated online poker. Koenig has generally included poker because he is a fan of it personally. However, sports betting is the bigger priority in terms of tax revenue. If axing poker proved necessary to get sports betting through, there’s no doubt that’s what would happen.

Full iGaming including online casinos is a nonstarter in Kentucky, which hasn’t even legalized their retail equivalents.

What will help Kentucky’s effort in 2022

There are a lot of external factors that impact a bill’s chances. In fact, you could say that most of politics is about external factors, and about waiting for them to line up in your favor.

In some ways, 2022 seems like a good year for Kentucky’s effort.

For starters, it’s an even number. That’s not numerology, it’s about the state’s legislative cycle. Even-numbered years are budget years, which matters to any bills which create new revenue. Since the main political reason to legalize gambling is to tax it, that includes Koenig’s effort. By the rules of Kentucky’s legislature, such bills require a greater percentage of votes to pass in non-budget years, so even numbers are the way to go.

There is also the fact that the winds are blowing in favor of sports betting nationally. Almost two-thirds of states have now gotten on board. Being a hold-out is now a more radical proposition than getting on board.

That is in turn reflected in public sentiment. Even Kentucky Republican voters are in favor of sports betting, with 58% supporting and only 34% opposing. Support among Democrats and Independents is stronger still.

Finally, there are economic factors. State coffers took a hit during COVID and need refilling. States that have sports betting – and especially those with a full spread of online gambling options – are getting a boost from that. Meanwhile, six of seven of Kentucky’s neighbors have now legalized it, with Missouri the lone exception, and even it is considering the idea.

As it stands, Kentucky sports fans are crossing the border to place bets where it’s legal. That being the case, it’s increasingly difficult to justify foregoing that revenue.

The case against success in 2022

That said, you probably wouldn’t want to bet on Koenig’s effort to succeed, at least not at even money. There are two major reasons that there is less support in the legislature than there is among the general public.

First is simple partisanship. The governor, Andy Beshear, is a Democrat, while both halves of the legislature are strongly Republican. That makes the legislature reluctant to hand him a win, especially on an issue that’s more popular among Democrat voters than Republicans, even if the latter are more for than against it. Ironically, the bill’s chances might be better with a Republican governor, despite the two parties’ respective leanings on the topic.

The second is the outsized influence of social conservatives among the Kentucky Republicans. The Family Foundation of Kentucky is vehemently anti-gambling, and a major donor to Republican candidates in the state. Getting the bill through the House would require a minimum of 26 Republican votes in favor, and likely much more than that. Any Republican doing so would be at risk of having that support reduced or pulled.

The Senate would be an even bigger lift, with 30 Republican senators to just 8 Democrats.

Kentuckians face a potentially long wait

Unfortunately, if the bill fails in 2022, then it probably won’t succeed in 2023. Here we’re looking at the flip side of the budget years issue. If it can’t get the votes to clear the bar this year, it will only be a higher bar next time.

The state’s gubernatorial election isn’t until November 2023 either. So there too, if the hope is for the partisan impediment to vanish, the earliest chance at a change in power would be for the 2024 legislative session.

Add to this the regulatory red tape which follows legalization, which often takes the better part of a year.

In other words, even if 2022 is the year for legalization, a launch might not come until 2023. And if this year’s effort fails again, then Kentuckians might be waiting until 2025 or beyond to place legal bets without leaving the state.

Here’s hoping, then, that this is the year the broken record skips clean of its problematic groove, and the song can continue.

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