Kentucky sees gambling measure including online poker introduced for fifth consecutive year

Haley Hintze
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Posted on: January 10, 2023 5:13 pm EST

Try, try, and try again, might be the motto of some of Kentucky’s state legislators, who for a fifth consecutive year, have introduced at least one gambling-expansion measure in the state that includes provisions for the legalization and regulation of online poker. The latest such bill, HB 106, was sponsored by three House Democrats and focuses on the legalization of sports betting in the Bluegrass State, but also includes DFS (daily fantasy sports) and online-poker provisions.

The three Dem sponsors — Rep. Derrick Graham, Rep. Cherlynn Stevenson, and Rep. Rachel Roberts — dropped their bill late last week. The bill would exempt sports betting, fantasy sports contests, and online poker from already existing bans against most forms of gambling in Kentucky. HB 106 was immediately assigned to the House Committee on Committees, which serves as the lower chamber’s funnel to other committees which may debate the specifics at a later date.

HB 106 is similar in many regards to legalization measures that have been introduced each year since 2019 in Kentucky, though none of those earlier bills have made a serious run toward becoming law. The perceived increase in pressure over seemingly lost tax revenue, as viewed from some of Kentucky’s neighboring states that have legalized sports pressure, is likely to increase interest this time around, though several factors still play against the bill’s potential as well.

Conservative state with solid Republican legislative majorities

Kentucky generally ranks in the top third of conservative states on most issues, including a large conservative-religious base adamantly against gambling in most or all forms. Add that to an even larger Republican disparity in Kentucky’s House and Senate chambers, and a Democratic-sponsored bill is swimming upstream from the start. As Gambling.com’s Steve Ruddock noted, it’s far more likely that a Republican or bipartisan bill, if introduced, will garner more serious support.

Republican Rep. Adam Koenig was the primary sponsor of several earlier pro-poker bills, and though the new HB 106 is similar in many regards, Koenig is not yet onboard, meaning he could opt to support a competing bill.

Online poker a separate and controversial entity

One complication is that even if the sports-betting core of HB 106 or a rival bill draws wide support, the online-poker part of the bill could be jettisoned. That’s what happened in Florida when that state’s legislature and the Seminole Tribe fast-tracked a sports-betting legalization measure that originally included online poker as well. Getting rid of the poker provisions allowed the rest of the bill to gain extra legislative support, and thus be quickly passed and signed into law, subsequent issues about the legality of the Florida bill as passed notwithstanding. Kentucky would not face the IGRA issues still in play in Florida.

There’s also the long, combative history between the Commonwealth of Kentucky and the early, largely unregulated years of online poker in general. In 2008, Kentucky infamously tried to seize 141 internet domain names associated with several forms of online gambling. The state was found to lack standing to continue that action, but anti-gambling forces later found a new target, suing PokerStars in 2011 under an 18th-century gambling blue law.

That kicked off a decade-long battle that reached the US Supreme Court before Kentucky and PokerStars’ current owners, Flutter Entertainment, reached a $300 million settlement in 2021, with fully 25% — or $75 million — going to the law office that argued the case on Kentucky’s behalf on a contingency basis.

The element that pertains to present-day legalization efforts is how much support online poker can garner, given the state’s earlier demonization of online poker and online gambling in general.

Retrenched Churchill Downs less likely to support expansion

Another element riding against HB 106’s chances for success is that the state’s largest gambling-related business entity, Churchill Downs, Inc., is somewhat less likely to support gambling expansion than it would have been several years ago. Churchill Downs, via its online Twin Spires entity, initially looked like it would jump into online gambling as widely and strongly as possible; in 2011, Churchill Downs even signed Michael “The Grinder” Mizrachi as a Breeder’s Cup brand ambassador.

The slow pace of legalization at both the federal and state levels likely forestalled Churchill Downs’ grand plans, however, and after years of waiting for a market to develop, Churchill Downs ultimately retrenched, pulling its Twin Spires brand from some markets and instead began seeking partnerships with already-licensed operators on a state-by-state legislator. The revised plan doesn’t mean Churchill Downs is against HB 106 or similar measures, but it may not feel the sense of immediacy the company once demonstrated.

All these factors, unfortunately, paint a cloudy short-term future for HB 106 and the chances of regulated online poker in Kentucky. 2023 may still be “too soon” for the game in the Bluegrass State.