Kentucky Governor's veto on gambling reform overridden, prediction market ban to come
Kentucky Governor Andy Beshear’s veto of House Bill 904 was overridden by the Kentucky legislature after just one day, meaning that the sweeping gambling reform , which includes a restriction on prediction market operations in the state, is now set to be codified.
Why the bill had been vetoed
Beshear originally vetoed the bill due to concerns that Governor oversight would be bypassed, rather than issues specifically related to gambling policy.
In his explanation, he said that he chose to veto HB 904 due to concerns about how it would authorise the Kentucky Lottery Corporation and the Kentucky Horse Racing and Gaming competition to file emergency and ordinary administrative regulations without the Governor’s review and signature.
He argued that this would prevent the Governor from being able to carry out certain constitutional duties and would allow boards and agencies to impose rules on Kentucky residents without executive oversight.
With all that said, it seems that the House and the state Senate have deemed the Governor’s argument insufficient and have voted to override his veto and pass the bill regardless.
As indicated in prior SiGMA News reporting, an override of the veto was expected to come quickly, as the Kentucky legislative session was set to adjourn on 15 April, and supporters of the bill only needed a simple majority to nullify the Governor’s veto.
What the bill entails
The reform will now go to the Secretary of State, where the process will be finalised, and the bill will be put into law. It is reportedly set to come into force in 90 days. The bill introduces major changes to Kentucky’s betting industry.
One of the most important aspects of HB 904 is that the minimum legal age for someone to engage in sports betting will be raised from 18 to 21.
The bill also introduces restrictions on prediction market operations in Kentucky. It is set to prohibit sports betting operators, including those offering fantasy sports, from participating in or contracting with platforms which offer event contracts through prediction markets.
Other key aspects of the bill include the introduction of a 12 per cent tax rate on peer-to-peer daily fantasy sports operators, with fantasy contests set to be legally recognised under Kentucky state law. The bill also legalised fixed-odds betting for Kentucky’s horse racing tracks. Additionally, HB 904 introduces restrictions on college prop bets and a ban on election betting.
Prior to the wording on the prediction market ban being changed, major operators had warned that the bill could have forced regulated operators to exit the state, as it was originally more restrictive and would have prohibited all Kentucky-licensed operators from operating a prediction market within the United States.
The bill is considerably vast and is set to have a marked impact on Kentucky’s sports betting market, which has proven to be an impactful industry with regard to the state’s economy.
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