WKYT Investigates | Ca$hing in on sports betting

Supporters say momentum, like the need for new revenue, is growing. But resistance remains.
Supporters say momentum, like the need for new revenue, is growing. But resistance remains.
Published: Feb. 7, 2021 at 8:00 PM EST
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FRANKFORT, Ky. (WKYT) - The Super Bowl is the biggest American sporting event of the year, and not just on the field. The American Gaming Association estimates that more than $4 billion has been wagered on the big game this year.

Only a fraction of that was wagered within the law.

Sports betting is already allowed in close to half the country since the U.S. Supreme Court struck down a federal ban on it back in 2018. But you can’t do it here in Kentucky - at least not legally.

Calls are growing, though, for the commonwealth to cash in on it.

Dollars and sense?

“Everybody knows it exists,” Rep. Adam Koenig, R-Erlanger, said of illegal sports betting. “Everybody knows it happens. But people who do it don’t have any protections and the state’s not reaping any benefits from it.”

For several years now Rep. Koenig has sponsored sports wagering bills, including House Bill 241 this session.

He says an estimated $2 billion is wagered illegally in Kentucky each year. Under HB 241, five percent of the net money the state receives from sports wagering would go to addiction prevention and treatment, with the rest going toward the state’s pension liabilities.

Kentucky could be the last of all its neighbors to legalize sports betting.

  • It went live in Virginia in January.
  • West Virginia has handled $665 million lifetime in sports wagering, pumping $5 million in taxes into state coffers, according to state revenue reports.
  • In Tennessee, where sports betting launched in November, the sports betting handle totaled $312 million just in its first two months. That brought in about $5.5 million in tax revenue, numbers show.
  • Illinois’s total handled topped $1.39 billion in just five full months in 2020, bringing in more than $15 million in tax revenue, according to the gaming board’s monthly reports.
  • Indiana saw $2.2 billion in total handle - and roughly $17 million in tax revenue - since September 2019, gaming commission revenue reports show. (Keep in mind, many sporting events were canceled for much of the spring and summer of 2020.)
  • Sports betting is not legal yet in Ohio or Missouri, but officials say it could be approved in those states in 2021.

Here in the commonwealth, lawmakers project that sports betting could bring in at least $20 million in tax revenue each year.

Tug-of-war over wagering

Gov. Andy Beshear, D-Kentucky, has said that he wants to see sports betting. The Kentucky Chamber of Commerce lists it in its legislative priorities to restart Kentucky. And a bipartisan group of co-sponsors has signed onto Rep. Koenig’s bill.

But despite the growing momentum, some resistance remains inside and outside the halls of the state capitol in Frankfort.

The Family Foundation - among those leading the charge against historical horse racing - also opposes sports betting. Executive Director Kent Ostrander says all the talk of dollars and cents often leaves out the toll that gambling can take on families.

“We don’t want families to be predatorily used in a gambling scheme of any kind,” Ostrander said. “When you have a pool in your backyard and you don’t bother to put a fence around it, you can be liable if the neighbor’s children come over and get hurt in that pool. Because it’s an attractive but dangerous nuisance. Gambling is the same thing.

“You can win all kinds of money, but you can also lose a whole lot,” he said, “and rarely is that mentioned as you enter the game.”

Two million American adults (one percent of the population) meet criteria for severe gambling problems in a given year, according to estimates from the National Council on Problem Gambling. Another four to six million could be considered to have “mild” or “moderate” gambling problems, the NCPG says.

Ostrander says he believes the real numbers could be even higher.

“Tell me the one limitation there is on gambling,” Ostrander said. “There are none. The gambling institution can take you for every penny and just smile, pat you on the back and tell you, ‘We’ve got a 12-step program for you.’”

Ostrander also questions how much financial good it would actually do for the state.

‘It’s part of the culture’

Yet observers say a growing appetite for sports betting exists in Kentucky - especially with the state’s strong attachment to college athletics.

And sports wagering is becoming more mainstream as it becomes more ingrained in sports itself: Over/unders, point spreads and money lines are becoming as common on scoreboards and in sports apps as dates, times and TV channels.

“I do some work for ESPN and we now, every single time we talk about the game, we talk about the point spread. On the air we talk about bets to make,” said Matt Jones, host of Kentucky Sports Radio. “So it’s part of the culture.”

Sports gambling has been a recurring topic on KSR lately as Jones tries to tally where lawmakers stand on the issue compared to their stances on historical horse racing.

“I think it is absolutely hypocritical of lawmakers to be for historical horse racing and not sports gambling,” he told WKYT’s Garrett Wymer. “So I’m trying to get them all on the record about sports gambling and see which ones say, ‘No, I’m against sports gambling, but I’m for historical horse racing,’ which, of course, is completely made up.”

Jones said he thinks 60 to 70 percent of Kentuckians would support sports betting if it were put on the ballot.

“It is not a controversy,” he said. “And a lot of the ones that would vote no are out there buying lottery tickets and telling themselves it’s not gambling. I’m here to tell you, that’s gambling, too, it’s just gambling you cannot win.”

What are the odds?

Many, like Jones, say they believe it is a matter of “when,” not “if,” sports betting is legalized in Kentucky.

Coming into this year, a number of industry publications expected Kentucky to be one of the next states to pass sports betting.

Those prospects, however, have cooled a bit for several reasons, including a focus on historical horse racing after the Kentucky Supreme Court ruled in September that some of the machines used across the state are not legal.

(Historical horse racing handle was more than $2 billion in Fiscal Year 2020, bringing in $33.8 million in taxes, according to pari-mutuel excise tax records from the Kentucky Horse Racing Commission.)

Lawmakers also have to pass a budget during the 30-day short session. As of Super Bowl Sunday, just 19 legislative days remain in the General Assembly’s 2021 regular session.

Rep. Koenig said he is unsure of his bill’s chances of passing this session, but said the odds were likely as good as they were in the previous session, when his proposal failed despite having what was believed to be majority support in both chambers.

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