Is the proposal for legal online poker "in trouble" in Kentucky?
Online Poker Report

Kentucky Interest Group Warns Of Hurdles Ahead For Online Gambling Bill

Kentucky online poker bill

It’s been two weeks since a Kentucky online gambling bill passed the Licensing, Occupations and Administrative Regulations Committee (LOARC) with unanimous support. It’s now in the hands of the House Rules Committee, whose job is to decide when it’s ready for a full vote.

So far, there’s been no movement beyond that.

There was some chatter about the possibility of another vote by the end of this week, but the bill’s sponsor, Rep. Adam Koenig indicated Thursday that wouldn’t be happening.

Opinions vary on Kentucky online gambling

At this point, the prospects for online gambling in Kentucky depend on whom you ask.

It does seem likely that HB 137 will garner the necessary votes to get out of the House of Representatives. That’s better than a similar bill authored by Koenig did last year.

Once it leaves the House, however, there are at least two more major hurdles it will have to clear.

First it needs approval from the Senate, which is apparently a big question mark. If that happens, then obtaining the signature of Gov. Andy Beshear figures to be a formality. The new governor is a vocal supporter of regulated gambling expansion.

Even if passed, however, a new law could face a constitutional challenge from opponents outside of the state legislature.

Family Foundation of Kentucky opposed

If you ask the Family Foundation of Kentucky (FFK), the bill is “in trouble” both in terms of its support and its constitutionality.

The FFK is a non-profit organization founded in 1989 to advocate for socially conservative legislation. It typically focuses on issues such as abortion, traditional marriage, education, drugs and pornography — but also, not infrequently, gambling.

As a 501(c)(3) organization, the FFK is not allowed to lobby on specific pieces of legislation. It has, however, done what it can to oppose HB 137 and Koenig’s previous bills indirectly, if not particularly subtly.

Senior Policy Analyst Martin Cothran, for instance, provided direct testimony to LOARC prior to its vote on the bill on Jan. 15. In that testimony, he presented an argument that the bill runs afoul of the state Constitution. He expects the Senate to act as a check against attempts by the House to expand gambling in the state on the basis that it has done so in the past.

More recently, Cothran sent a press release to local media outlets declaring that the bill is in trouble. The same press release, however, also claims that an informal poll of House legislators suggests the bill won’t even get out of the lower chamber — a claim that the bill’s sponsors directly contradict.

Momentum needed to clear coming hurdles

Rep. Al Gentry, one of the bill’s co-sponsors, told the Louisville Courier-Journal that the bill has sufficient votes to get through the House. The trouble is that the Republican caucuses don’t want to rush the vote; they want to wait until they’ve established more support in the Senate.

The attitude, Gentry says, is: “If we don’t think we’ve got the votes, then don’t send it over there.”

Because 2020 is a budget year in Kentucky’s legislature, only 51 votes — a simple majority – are needed for the bill to pass the House. Last year’s bill needed 60 votes and came up short. Passing the bill with only the minimum support, however, might lead to holdups in the Senate.

And yet, Gentry worries that stalling to try to pass the bill by a more decisive margin could backfire.

“In general,” Gentry says, “with something that sits a long time, it just gives more reason for people to nit-pick and present reasons why not to vote for something.”

For his part, Koenig denies that the bill is in trouble. While he acknowledges that it is a controversial issue and therefore faces additional hurdles, he believes he and his allies in the House will surmount those obstacles.

A constitutional question in Kentucky

It’s often the case that constitutional issues come down to matters of semantics and legal precedent. The potential challenges facing HB 137 are no exception.

At issue is Section 226 of the Kentucky Constitution, Subsection 3, which begins:

“Except as provided in this section, lotteries and gift enterprises are forbidden, and no privileges shall be granted for such purposes, and none shall be exercised, and no schemes for similar purposes shall be allowed.”

The first question is what “lottery” means, and legal precedent seems to be working against the sponsors in that regard.

]In his testimony to LOARC, Cothran pointed to a 1999 opinion by then-Attorney General Ben Chandler. That opinion held that the state’s courts had been consistent in interpreting “lottery” to mean “any game distributing a prize predominantly by chance, for consideration.”

However, that simply raises the question of whether sports betting and poker distribute prizes “predominantly by chance.”

In defending his bill, Koenig points to Kentucky’s last constitutional convention held in 1890. Convention delegates specified that while betting on “games of chance” would remain prohibited, they deemed sports to be “games of skill” — and therefore permissible for betting.

Senate might demand KY gambling compromise

Compared to the possibility of a constitutional challenge, the danger of failing to get the bill through the Senate is much more immediate and pressing.

On the other hand, it’s not an all-or-nothing proposition. The Senate is also working on a Kentucky sports betting bill of its own, SB 24.

Both bills could pass, or HB 137 could arrive in the Senate while it’s still considering its own bill. In those cases, there might be an effort to reconcile the two. SB 24 is a retail-only sports betting bill, however, containing no provisions for online gambling or poker in any form.

The potential for compromise is good for the prospects of sports betting coming to Kentucky. It might, however, be bad news for online poker. Resistance to the bill is primarily rooted in social conservatism, while the potential tax revenue is a key factor driving legislative support.

Poker arguably bears a greater superficial resemblance to casino gaming than sports betting does. And yet, the potential revenue from online poker is much, much smaller.

There’s at least some risk, then, that poker could ultimately be shed in the interests of compromise.

Alex Weldon
- Alex is a freelance writer and artist living in Dartmouth, Nova Scotia. He has been doing data-based analysis of the online gaming industry since 2016.
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