Kentucky betting on $23M boost from sports wagering

Kentucky is gearing up for the start of sports betting at retail locations on Thursday.

“Excitement for sports wagering is building as we are just one week away from opening retail locations and one month from opening mobile applications for sports wagering,” said Gov. Andy Beshear said in a statement last week.

Sports wagering is forecast to increase the state’s revenue by about $23 million a year when it’s fully implemented. The revenue at first will support the oversight of sports betting and later will go to Kentucky’s pension fund.

An additional 2.5% of the revenue will support the problem gambling assistance account, which is operated by the state Cabinet for Health and Family Services.

“Bringing sports wagering to the state not only gives Kentuckians a much-anticipated new form of entertainment, but also brings money to the state to support pensions,” Beshear said last month, and this will free up “money that can be used to build a better Kentucky through the funding of education, economic development, disaster recovery and other necessary projects, like providing cleaner water, building roads and high-speed internet.”

In June, S&P Global Ratings upgraded Kentucky’s issuer credit rating to A-plus from A; the outlook was revised to stable from positive.

S&P said the upgrade was supported by the state’s “sustained trend of structural balance, with operating surpluses that have led to a robust budgetary trust stabilization fund at its highest level ever, continued pension funding commitment following pension reforms, and funding these pension costs in excess of actuarially determined contributions.”

S&P credit analyst Anne Cosgrove noted Kentucky’s “commitment and execution to strengthen its budgetary flexibility and long-term financial stability, which we expect will continue in the current and future budget cycles.”

In May, Fitch Ratings raised Kentucky’s issuer default rating to AA from AA-minus and upgraded the state’s annual appropriation-backed debt and other state IDR-linked debt to AA-minus from A-plus. Fitch assigned a stable outlook to the credit.

Kentucky is rated Aa3 by Moody’s Investors Service and AA-minus by Kroll Bond Rating Agency. Both have stable outlooks on the credit.

The Kentucky Horse Racing Commission’s Sports Wagering Advisory Council released a wagering catalog last week that includes a list of sports available for betting.

Some of the sports leagues approved for wagering include the National Football League, Major League Baseball, National Basketball Association, Women’s National Basketball Association and NCAA baseball, softball, basketball, football and hockey.

“With the sports wagering catalog, bettors can start planning their bets,” said Ray Perry , Public Protection Cabinet Secretary and Sports Wagering Advisory Council member.

The types of wagers offered by a licensee are defined in the sports wagering administrative regulations. They include single game bets, teaser bets, parlays, over-under bets, money line bets, pools, in-game wagering, in-play bets, proposition bets and straight bets.

Earlier this year, the state legislature approved House bill 551, which created an excise tax on sports wagering. This includes a 9.75% tax rate on the adjusted gross revenues on wagers made at a licensed facility and 14.25% on bets placed online or on a smart phone.

On Thursday at 6 a.m., ET, bettors can deposit money into their pre-registered mobile accounts — only with state-approved mobile applications — and place an in-person bet at licensed retail facilities. On Thursday, Sept. 28, approved mobile applications can start taking bets. 

Kentucky chose a tiered implementation, which has been used in several states and will allow for the testing of policies and procedures before the full rollout that includes the mobile applications.

“Kentuckians now know where they can place a bet and the type of sporting events and wagers that licensees can offer,” Beshear said.