Kentucky sports betting is now legal after Gov. Andy Beshear (D) signed a sports betting bill into law on Friday, March 31, just one day after the bill was approved by members of the Senate.

So what now? You can log on to your favorite online sports betting app and bet on the NCAA basketball championship, right?

Oh my no. The Bluegrass State is entering into a months long process that will craft the framework to allow Kentuckians to likely bet towards the tail end of 2023 or the very beginning of 2024.

Kentucky’s sports betting journey

Last week, Beshear signed Rep. Michael Meredith’s (R-19) sports betting bill, HB 551, into law, making Kentucky the 37th state to legalize sports betting.

The bill was approved by the Kentucky Senate by a vote of 25-12, eclipsing the necessary three-fifths majority to be approved.

So what now? Sports betting is officially legal now in Kentucky, but the law will not take effect until June 28.

Beginning June 28, the Kentucky Horse Racing Commission has six months to determine regulations and licensing processes for the state. It remains to be seen if the racing commission will use their entire six month allotment to craft the rules, but most state commissions try not to accelerate the process to ensure a smooth rollout.

Once the commission completes the regulations, the state’s nine racetracks can begin applying for sports betting licenses. The commission will have to review the license applications, award the applications, ensure that both retail and online sportsbooks reach regulatory compliance, and then give the green light to begin sports betting.

This puts Kentucky’s sports betting start date squarely at the tail end of 2023 or the very start of 2024.

It is conceivable that retail sports betting could begin earlier in the state. Massachusetts most recently employed this strategy, launching retail sports betting at state casinos on Jan. 31, 2023, almost a month- and-a-half before launching online sports betting on March 10, 2023.

Either way, do not expect Kentucky sports betting to launch until late 2023 at the very earliest.

What sportsbook operators can Kentucky expect?

Meredith’s bill will legalize retail sports betting at licensed Kentucky horse tracks, such as Churchill Downs, as well as online sports betting throughout the state. Each licensed horse track (of which there are nine in the state) will be eligible to partner with up to three online sports betting skins, allowing for a maximum of 27 operators in Kentucky.

The 27 maximum operators will allow for a mix of the more established online sports betting operators as well as smaller operators hoping to get into the market.

So what can Kentucky expect?

DraftKings and FanDuel, the two largest online sports betting operators in the country, are likely a lock. Both currently operate daily fantasy sports in the Bluegrass State and will likely forge relationships with horse tracks for sports betting as well.

BetMGM and Caesars Sportsbook, the #3 and #4 operators in the country, are also strong contenders for licenses in Kentucky.

So who does that leave? It will be interesting to see if Bet 365, Barstool Sportsbook, WynnBET, PointsBet, and BallyBet apply for licenses in the Bluegrass State. All are currently operational in nearby Ohio and will likely try to reach out into Kentucky as well.

With the large amount of licenses available it will be interesting to see if some of the other operators, such as Betr, Parx Interactive, Tipico or Superbook, can forge relationships with Kentucky tracks to enter the market.

Sports betting bill details

The bill sets the retail tax rate at 9.75% and the online sports betting tax rate at 14.25% on adjusted gross sports betting revenue.

Here are further details on the proposed bill:

  • Bets on professional sports, eSports, college events, Olympics, and amateur events will be allowed.
  • Residents age 18 and up will be able to participate.
  • 2.5% of sports betting revenue will be earmarked for a problem gaming fund.