Flurry of amendments create another barrier for Kentucky sports betting bill

Lawmakers filed nearly a dozen "unfriendly" floor amendments last week to the bill seeking to legalize and tax sports betting in Kentucky.

Rep. Adam Koenig, R-Erlanger, the main sponsor for House Bill 137, told The Courier Journal the 11 floor amendments were all filed by Republican opponents of his legislation and expanded gambling, assuming their intent was to throw a wrench into the bill's progress.

After passing out of a House committee by an 18-0 vote on Jan. 15, HB 137 has been passed over for a vote on the House floor every day of the legislative session.

Despite 40 co-sponsors, the near-unanimous support of House Democrats and backing from Gov. Andy Beshear, the bill is having trouble gaining majority support in that chamber's GOP caucus, which it needs in order to get a vote on the House floor.

"This is a Republican Party caucus issue," Koenig said. "I think it's fair to say that if a bill has the majority support of the (Republican) caucus, it probably would get heard. We've got some work to do to get to that point."

The bill would allow Kentuckians to bet on sporting events at licensed facilities, limited to horse racing tracks and the Kentucky Speedway. People could also download a mobile phone application to bet on sports anywhere. The Kentucky Horse Racing Commission would be responsible for regulating sports betting.

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In addition to taxing online poker and fantasy sports contests, the taxes and licensing fees from sports betting would bring in an estimated $22.5 million of new tax revenue each year for the state, according to a study commissioned by Keeneland, a Lexington horse track.

The amendments would greatly alter various aspects of the bill, significantly raising its tax rates, subjecting the Horse Racing Commission to stricter open records requirements, devoting more revenue to gambling addiction assistance and allowing a wider variety of facilities to be eligible for a sports betting license.

Eight of the floor amendments to HB 137 were filed by Rep. Jason Petrie, R-Elkton, the chairman of the House Judiciary Committee.

While sports bets at licensed facilities are taxed at 9.75% and bets on mobile apps at 14.25%, one of Petrie's amendments would raise those rates to 14% and 21%, while two others would double and triple those rates.

Another of Petrie's amendments would allow local governments to prohibit sports betting, fantasy contests and online poker in their jurisdiction, while also requiring the sports betting phone app to have software preventing betting in those areas.

Three Petrie amendments raise the portion of tax revenue going toward a problem gambling assistance account from 5% to 7.5%, 10% and 15%, with another requiring that any appeal to a final order of the racing commission take place in a circuit court that is more than 60 miles away from any horse track.

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Rep. Richard Heath, R-Mayfield, filed a significant amendment to allow many other venues besides race tracks to be eligible for sports betting licenses, including lottery retailers, restaurants where at least 70% of income is food and "any other secure location deemed appropriate by the commission."

Other amendments filed by Heath and Rep. Kim King, R-Harrodsburg, would require any information provided to the Horse Racing Commission about horse racing or sports betting to be deemed a public record under the Kentucky Open Records Act, as well as impose a penalty equal to three times the legal fees if the commission is found to have violated that law.

A common theme among the amendments is pushing back against a horse racing industry that has advocated for the bill, reflecting Republican Senate President Robert Stivers' past criticism that it is "picking winners and losers" by only allowing sports betting at such tracks.

The amendments also reflect a division within the Republican caucus that was exposed two weeks ago during a simple recognition of two Kentucky Lottery Corp. officials on the House floor by Rep. Jerry Miller, R-Louisville.

Miller, a supporter of HB 137, cited the Book of Genesis when detailing the billions of dollars from the lottery that have gone to college scholarships over the past 30 years, saying that good can come from this supposed "evil" of gambling.

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Rep. David Hale, R-Wellington, a Christian pastor, stood up to reply that he was "very displeased" and "aggrieved" by Miller's comparison of the lottery to the bible passage, while Rep. Chris Fugate, R-Chavies, quoted another book to say "woe to them that call evil good and those who call good evil."

Comparing gambling to opioids, Fugate said, "When we depend on the people of our district to lose money so the state can gain money, it's not biblical. ... Don't try to make things right that are wrong in God's eyes, because no matter how you slice it, it's wrong."

Both Hale and Fugate received applause from at least a dozen legislators after their statements.

Koenig noted that the legislative session is not yet halfway over and there is still time to pass his bill, but acknowledged that tweaks may have to be made to the bill if it doesn't gain more support in his caucus.

"I'm less optimistic than I was before, but I still like its chances," Koenig said. "Obviously, we still need to do some work and might have to figure out some little changes that might make enough people happy. We'll see."

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Reach reporter Joe Sonka at jsonka@courierjournal.com or 502-582-4472 and follow him on Twitter at @joesonka. Support strong local journalism by subscribing today: courierjournal.com/subscribe.