When 2019 began, Kentucky looked like it was on track to become the fifth state to legalize online poker — after Nevada, New Jersey, Delaware, and Pennsylvania.
West Virginia beat it to the punch, as it turned out, but the Bluegrass State could still become number six.
The sponsor of an early-2019 effort that came up short is starting to make some noise about redoubling his efforts in 2020.
Bill H 175, introduced by Rep. Adam Koenig this past spring, would have legalized both online poker and sports betting. Online poker would be regulated by the state lottery under the bill, while the Horse Racing Commission would oversee sports betting and daily fantasy sports.
Fast-forward a few months, however, and the effort was completely dead in the water. Unable drum up the 60-vote supermajority it needed to pass, Koenig vowed to return to the ring in 2020.
Some states’ attempts to legalize online gambling end up endlessly quagmired, with multiple iterations of bills submitted and rejected without much promise. California springs to mind as an example of one that keeps spinning its wheels. And don’t even get us started on New York.
In Kentucky, though, there are a few good reasons to expect the next incarnation of H 175 to pass.
One major cause of optimism has to do with a quirk of Kentucky’s legislative system. Lawmakers work on a two-year cycle, with the state’s budget laid out in even-numbered years. In those years, the rules work differently for bills related to revenue.
If a bill proposed in a non-budget year seeks to generate or appropriate revenue, it requires approval from 60% of the 100-member House to pass. In a budget year, however, it requires only a simple majority of 51 votes.
Even years also have longer sessions, giving Koenig more time to secure the required votes. The sponsor has indicated that he expects his fellow lawmakers to be more focused on tax revenue this year as they work on the budget.
Under projections from 2019, legal sports betting and poker would drive $20 million to $50 million in revenue to the state annually.
Even more notably, Kentucky just elected a new governor this fall.
Prior to his election, Andy Beshear was the state’s Attorney General. And in that role in 2018, he penned a letter to lawmakers urging them to legalize gambling.
Stamping out illegal gambling is impossible, wrote Beshear, but regulation can help minimize its harms. He further argued that tax revenue created by legal gambling could be used to fund harm-reduction programs and patch the hole in the state’s pension program.
As the new chief executive, Beshear is now positioned to have the final say on Kentucky online poker. Koenig will still need to find the necessary votes, but having the overt approval of the governor should make it a bit easier this time around.
Beshear’s stance represents a complete about-face from that of his staunchly anti-gambling predecessor, Matt Bevin.
Kentucky lawmakers who were previously on the fence, meanwhile, may regret the missed opportunity.
Most neighboring states in the Midwest have already passed similar legislation, and the rest appear to be on their way too. Success elsewhere may be seen as a model of what to expect in Kentucky, and the tax dollars being generated should inspire some budgetary jealousy.
Sports betting in Indiana has been particularly impressive since its September debut.
In their first month of operation, Indiana sportsbooks took $35 million in bets. The following month, that nearly tripled to $92 million. Prior to launch, a nonpartisan group estimated that the state’s annual tax revenue from betting could be anywhere from $3.4 million to $20.3 million. These early numbers suggest the actual number will be toward the top end of that range.
Likewise, PokerStars is putting up eye-catching traffic numbers with its new site in Pennsylvania. That will, hopefully, provide Koenig and Beshear with some additional data to justify the inclusion of poker alongside sports betting.
At the moment, Michigan is the only other state having a serious conversation about regulating online poker.
Taking these facts together, it’s not hard to see why Koenig is optimistic.
Of course, the only guarantee when it comes to state legislatures is that there are no guarantees. If you were going to bet on the next state to successfully pass a gambling bill, however, you could do worse than picking Kentucky in 2020.
The new legislative session begins on Jan. 7.