The Kentucky Legislature has overridden Gov. Andy Beshear’s veto of a bill that will greatly overhaul the sports betting landscape in the Bluegrass State.
On Tuesday, the Kentucky Senate and House voted to overturn Beshear’s Monday veto of House Bill 904, which alters the Kentucky sports betting law in a variety of ways, including prohibiting in-state college prop bets and tightening rules on prediction markets.
The legislation will go into effect in 90 days.
Veto over emergency clause
Beshear’s veto was less about the major changes to the Kentucky sports betting market, but a component that would allow two Executive Branch agencies the ability to file regulations without his approval. The legislation would allow the Kentucky Lottery Corporation and Kentucky Horse Racing and Gaming Corporation to file emergency and ordinary regulations without Beshear’s review.
“Under the Kentucky Constitution, the Governor is the Chief Magistrate of the Executive Branch and has a duty to ensure all laws are faithfully executive, including by agencies carrying out the law through regulation,” Beshear wrote in a statement. “In that role, the Governor reviews proposed emergency regulations to ensure they are necessary and meet legal requirements for emergency filing.
“Authorizing an agency to file an emergency regulation in this manner would prevent the Governor from carrying out his constitutional duties and allow boards and agencies to impose rules on Kentuckians without executive oversight, including boards whose decisions impact public safety.”
Simple majority for override
It was expected that the legislature would override the veto given the low bar in Kentucky, where just a simple majority is required.
“Virtually any bill that passed, we can override the veto on and almost always do, unless there was a technical error,” Rep. John Hodgson told Spectrum News.
The Senate passed HB 904 by a 24-13 vote followed by a 64-19 House vote.
Proposed Kentucky sports betting changes
Rep. Michael Meredith’s legislation has several major changes to the sports betting law:
- Raise betting age to 21 from 18.
- Restricts in-state collegiate athlete prop bets.
- Authorizes fixed-odds wagering on horse racing.
- Sets up fantasy sports regulations, including a 12.5% tax and impose a requirement of at least two participants, eliminating against the house contests.
Prediction market restrictions
Meredith’s bill alsos impose strict rules against prediction markets. Its original language could have resulted in major sports book operators that are operating prediction markets, like DraftKings, Fanatics and FanDuel to leave Kentucky.
In the original text, operators could not hold a Kentucky gambling license while operating a prediction market anywhere in the US. The sportsbook operators submitted a letter of opposition to the legislature, noting a potential loss of $40 million in tax revenue annually.
Ultimately, the language was changed to operating a prediction market in Kentucky.
