As a result of the $43 billion pension crisis in Kentucky, a gambling overhaul bill is currently being considered to generate revenue.
House Bill 175 was reviewed by the House Licensing, Occupations and Administrative Regulations Committee in a hearing on Wednesday. The document contains provisions for the regulation and legalization of fantasy sports, online poker and sports betting. Rep. Adam Koenig sponsored this bill as he believes that Kentucky is currently losing millions to unregulated sports betting operations.
Whereas, the bill prohibits betting on collegiate sports in Kentucky, it will legalize and regulate mobile sports and in-person betting across the state.
Currently, the state is battling a very heavy pension shortfall that amounts to $43 billion. The tax revenue generated by opening the gambling market for legal wagering operations can help to counter this deficit. John Farris, founder of Commonwealth Economics, has projected that if Kentucky legalized sports betting before neighboring states it could earn $48 million in tax revenue.
Tax Revenue from Sports Betting
Under bill 175 the tax on sports betting will be 14.25% for online operations and 10.25% for land-based operations. These tax rates are in line with most states that have legalized and launched wagering operations. A greater portion of this revenue would be used to pay off pensions and some part of it would be used to fund the provision of gambling addiction and prevention services alongside funding the regulation of sports betting.
The Wednesday committee was attended by a representative from FanDuel, a fantasy sports operator that turned into a sports betting operator. The representative asked that the creators consider authorizing betting on Kentucky collage sports because Kentuckians are already betting on college sports illegally.
There was no voting on the bill during the hearing on Wednesday and it now awaits further action in the Legislature.