Kentucky Governor vetoes gambling reform proposing prediction market ban
Kentucky Governor Andy Beshear has vetoed House Bill 904, a gambling reform which would raise the minimum legal sports betting age in Kentucky from 18 to 21 and prohibit prediction market operations within Kentucky, among other things. He cited concerns regarding the bypassing of Governor oversight in his reasoning for doing so.
Other aspects of the bill, which was introduced by Representatives Michael Meredith and Matthew Koch, include the legalisation of fixed-odds horse racing, the introduction of a 12 per cent tax rate on peer-to-peer daily fantasy sports operators, and the prohibition of betting on elections. HB 904 originally passed the House on 19 March 2026 and recently passed the state Senate earlier this month.
Meredith and Koch have said that HB 904 includes reforms which are aimed at safeguarding bettors and preserving the integrity of athletic competition. In addition to the aforementioned aspects of the bill, it also includes restrictions on college prop bets, which Meredith said are designed to protect student athletes, arguing that such measures could reduce undue pressure and potential misconduct. Lawmakers have argued that prop bets pose the risk of exposing young athletes to pressure or harassment.
HB 904 and prediction markets
The original wording in the bill regarding prediction markets was more restrictive. As it was originally written, HB 904 would have prohibited all Kentucky-licensed sportsbook operators from operating a prediction market within the United States. In response to this, major Kentucky-licensed operators DraftKings, FanDuel, and Fanatics warned that the bill would have gutted the regulated sports betting market and forced the exit of most regulated operators from the state.
This aspect of the bill was eventually reworded in order to limit the scope of the restrictions, as it now would simply prohibit operators from operating prediction markets in Kentucky, rather than the whole US.
Governor Beshear’s decision
Explaining his decision, Beshear said that he chose to veto HB 904 “because it would authorise two agencies, 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 continued that authorising an agency to file such an emergency regulation in this manner would, in turn, prevent the Governor from carrying out their constitutional duties and allow boards and agencies to impose rules on Kentucky residents with no executive oversight, “including boards whose decisions impact public safety”.
Given Governor Beshear’s provided reasoning for vetoing HB 904, it seems that his opposition towards the bill is related to concerns of overreach and maintaining the office of the Governor’s authority on certain matters, rather than concerns about gambling policy specifically.
Possibility of an override
Although Beshear has vetoed the bill, Kentucky lawmakers may be able to overrule the veto if they reach a certain majority of House and state Senate members, which would allow them to pass the legislation without the need for the Governor’s approval. Kentucky’s legislative session is set to adjourn on April 15, so any push to override the Governor’s veto would be expected to finalise today.
If the veto is not overridden, the bill could be revisited in future legislative sessions, but this would mean that Kentucky’s sports betting market and event contracts market would continue operating under the current rules.
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