Add Kentucky to the list of US states seriously considering a modernized expansion of gambling.

A multi-pronged bill that would legalize online poker, daily fantasy sports, and sports betting cleared its first legislative stop in Frankfort this week. The Licensing and Occupations Committee voted on Wednesday to advance a substitute for H 175 onto the House floor “with favorable expression.”

Another bill concerning casino gambling (H 190) is also on file, as are three standalone KY sports betting bills.

Changes to Kentucky online gambling bill

Rep. Adam Koenig is both the primary sponsor for the KY online gambling bill and the chairman of the aforementioned committee. Calling his own bill’s number for consideration, he vacated the chair to present it to his colleagues.

“Please introduce yourself for the record,” an interrupting voice drew a laugh from the room.

“My name’s Adam Koenig,” he smiled from the table. “I’m a sad little man from Kenton County who’s here to discuss his desire to provide more freedom, more safety for people and more revenue for the state. That’s all.”

Koenig ran through the committee changes to the bill he introduced, including a clarified definition for “professional sports venue.” The substitute also tightens the permitted sports betting markets and halves the licensing fee, initially proposed at $1 million.

Under the bill, the Kentucky Horse Racing Commission would oversee sports betting and DFS operations in the state. The Kentucky Lottery Corporation, meanwhile, would administer KY online poker.

PokerStars unwelcome in Kentucky?

Another modification concerns online poker, and more specifically seems to target PokerStars without directly naming it.

Koenig referenced his state’s lawsuit against the industry leader in making changes to ensure that nothing in the bill absolves the company of any liability due to Kentucky. PokerStars recently — and successfully — appealed a civil judgment approaching $1 billion for its prior operations in the state.

In an apparent attempt to eliminate the company from the KY marketplace, the committee added this section to the bill (new language in bold):

(3) A license to conduct online poker in the Commonwealth shall not be issued by the corporation until the proposed vendor has demonstrated to the satisfaction of the corporation that: […] (b) The vendor has not been convicted of a violation of the Unlawful Internet Gambling Enforcement Act of 2006, as provided in Title 31 of the United States Code, sections 5361 to 5366;

That language may not meet its intent, however, as PokerStars has never been convicted of a UIGEA violation. Kentucky did win that nine-figure decision against the company in late 2015, but the appellate court has since vacated even that civil judgment.

Next steps for KY online gambling bill

Though it is early days for this bill, it does seem to have some good support in the lower chamber. The committee’s verbal vote is not recorded, but it sounded unanimous among the members. It now moves out onto the floor for its first reading before the full chamber.

One of Koenig’s cosponsors, though, does have some gripes.

“My biggest issues are that we’re not going far enough on expanded gaming,” Rep. Alan Gentry offered to the committee. He went on to explain some of his logic for supporting this piece of legislation.

“You can agree or disagree with gambling, but it already exists. I live in Louisville. People that like to throw dice and play cards and pull a slot machine already do it. The only thing we don’t have it the revenue to deal with the small fraction of people that are not able to control their addiction.”

One of the key components of the bill is its establishment of a problem gambling fund within the Commonwealth.

If this bill does eventually pass, Kentucky would become just the fifth state to legalize online poker. The others:

Closer to home, West Virginia is moving forward with a spirited effort to legalize full-scale online gambling this year, too. Kentucky’s northeasterly neighbor is also one of eight states with a regulated sports betting industry in place.