Last week, the Kentucky General Assembly finally passed a bill legalizing sports gambling in the state.
For my column on that topic, I corresponded with a couple of experts on the subject. I couldn’t fit all of their comments into the print edition of the column, so I’m posting them here.
‘A huge deal for the state of Kentucky’
First is Brad Taylor, who hosts the Bottom Line sports gambling show on WLXG AM-1300 here in Lexington.
Here was Brad’s reply to my query about the passage and the impact it might have:
“Although many people in Kentucky were getting their ‘action’ down anyway, this is a huge deal for the state of Kentucky. In January alone, the state (of) Ohio drew $1.113 billion in sports wagering, while keeping over $208 million. Kentucky won’t draw that much, but it has to help the state. Kentucky being the 38th state to pass this is a “better late than never” scenario. And to be honest, I didn’t expect this to happen until 2024. But Robert Stivers, who I addressed at the end of every single one of my radio shows for a solid year by sarcastically signing off saying ‘Thanks a lot, Stivers,’ changed his tune and voted ‘Yes.’ If that can happen, anything can happen!
“I was at a sportsbook in Southern Indiana for the first weekend of the NCAA Tournament. The parking lots were filled with vehicles with Kentucky license plates. And the loudest ovations in the sportsbook came from Kentucky basketball, not Indiana, or even Purdue becoming the biggest underdog ever to lose an NCAA Tournament game. We know the Big Blue Nation is everywhere. But the fact that they had to drive over the state line just to put a couple of dollars on their beloved Wildcats, while Indiana residents could relax at home and wager from their cell phones, simply didn’t make sense. Why couldn’t Kentucky have this set up so that all this money wouldn’t leave the state?
“And where did these big winners go after the games? They went to the slot machines and the tables in the casinos and gave their winnings right back. I’d even heard stories of the Jellico exit off I-75 just inside the Tennessee state line had several cars with Kentucky license plates parked at that exit on days before big college and NFL football days to get their wagers in before driving back to their Kentucky home. Thankfully, this money will now stay inside the state.”
‘Be warned that this is a very tough gig’
“The sportsbooks will do their very best to be up and running before Labor Day Weekend. They don’t want to miss one weekend of football profits they can make, especially off the new customers who will get huge bonuses to sign up. But new sports gamblers need to be warned that this is a very tough gig.
“Hollywood and the media sensationalize this sometimes to make it seem easy, but even the very best sports gamblers in the world don’t come close to picking 60% winners. Some sports gamblers are delusional in thinking they can do better than 60% long term, and that can cause problems. As crazy as it sounds, discipline, data-based handicapping, and money management are much more important qualities of a successful sports gambler than simply picking winners. The sports gambling world is filled with people who can pick 55% winners for a month and still lose money. It’s not as easy as it seems.”
Kentucky is a ‘sports-mad state’
I also reached out to Steve Bittenbender, who has extensively reported on the fight to legalize sports betting in Kentucky for Casino.org. I asked Steve if he was surprised the bill passed and what he thought the impact would be. Here was his reply:
“A) I was a little surprised it passed, mainly because of the votes that were needed. The Senate was a couple votes short last year when it needed just a simple majority. Going from needing 20 to 23 was a lot to ask for, in my opinion, even with a lot of new faces in the chamber.
“B) The impact will depend on a few factors.
“1 – Interest. Kentucky is a smaller state, but it’s a sports-mad state, so there will be a lot of people who want to take part. Also, the way the license fees are set up will open the door maybe for a few smaller operators to enter as well. (FWIW, Indiana has +/- 13 online operators and Ohio has 17. That’s probably the ceiling here, especially as the number of operators has contracted some).
“2. I’m not sure what the tax revenue will be. The $22-23 million was from an older study, IIRC, and a lot has changed in the industry since then. Namely, more bettors are playing parlays, which means more revenue for sportsbooks. Louisiana may be a good measuring stick since it’s a similar size market and the tax rates are almost identical.
“One thing to note is people like to take a look at the handle. It’s a nice big shiny number, and it does indicate how much interest and traffic there is in the market, but the more impactful numbers are operators’ revenue and the state’s share.
“Senate President Robert Stivers took a lot of heat about his comments calling sports betting an ‘appetizer,’ but from a revenue standpoint, he’s right.
“But raising revenue shouldn’t be the only factor in legalizing something that millions of people can do already in their states.”
‘I expect online to dominate the market’
Steve later added this:
“Double checked my numbers. Indiana has 13 online operators.
“Also one other thing to point out, while tracks can have retail sportsbooks at their facilities, including HHR satellite facilities, I expect online to dominate the market as it does in every other state that offers both online and in-person wagering.
“Ohio released its February sports betting figures on Friday. Of the $638.8 million wagered in Ohio in February, only $17.7 million of that was bet at a retail sportsbook. In Pennsylvania, retail accounted for $43.7 million of the $599.5 million wagered.
“Brick-and-mortar sportsbooks may draw crowds for big games or special events, but I don’t think they’re going to drive many people to the tracks on a regular basis.
“I’ll stop there.”
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