The Kentucky House passed a bill to legalize sports betting in the state early Monday evening.

The 62-34 vote on House Bill 551 cleared the three-fifths majority supporters needed to get since the bill generates revenue and makes appropriations in a non-budget year.

The bill would allow Kentucky’s nine racetracks to offer retail sportsbooks at its tracks and simulcasting facilities. It also would allow tracks to partner with up to three mobile operators each.

Tracks would pay $500,000 for a license, with an annual renewal fee of $50,000. Operators would pay a $50,000 license fee and an annual renewal fee of $10,000.

Retail sports betting revenues would be taxed at 9.75% of adjusted gross revenues, while online operators would pay a 14.25% tax. The only deductions allowed would be for the .25% federal excise tax the federal government places on each wager.

It’s the second straight year the House has passed a bill. Once again, the bill now heads to the Senate, where last year’s bill died after failing to get a committee hearing or a floor vote before the session ended. This year, the bill will need 23 yes votes to pass in the 37-member Senate.

However, supporters are expressing optimism for this year’s bill, even as just five legislative days remain in the session.

State Rep. Michael Meredith, R-Oakland, the bill’s primary sponsor, believes they are about a couple of votes away from the 23 they need to pass the bill in the Senate this year.

Problem Gaming Fund Added to Bill

One reason for Meredith’s optimism is what was included in a House floor amendment Monday. That bill included a provision for a problem gaming fund, with that fund receiving 2.5% of the tax revenue generated annually.

That was explicitly added, Meredith said, because a couple of senators requested it.

Hopefully, that’ll shore up those (votes), and we’ll narrow it down,” Meredith told Casino.org after the bill’s passage.

The problem gaming fund was one that state Rep. Al Gentry had championed, D-Louisville, who has been the primary co-sponsor on sports betting legislation in the House.

Gentry had filed a bill earlier in the session that would have created a problem gaming fund that would have received money from all sectors of legal gaming in Kentucky. While this fund would only be covered by sports betting tax revenue, he told Casino.org he was still delighted to see it inserted.

Kentucky is one of a few states that does not have a problem gambling fund.

“I put a lot of work into pushing that for a few years now and glad to see it’s in there,” he said.

In addition, both Meredith and state Rep. Matt Koch, R-Paris, have talked about bringing up a more comprehensive problem gaming fund for next year’s session.

The problem gaming fund was the second significant positive change for the bill. Last week, the House Licensing, Occupations, and Administrative Regulations Committee approved a substitute bill that removed a 12-month, in-person licensing requirement for mobile account registrations.

While the House passed Meredith’s floor amendment, two others brought by a bill opponent failed.

State Rep. Josh Calloway, R-Irvington, sought to ban the use of credit cards for sports betting deposits and raise the minimum age to place a wager on a sporting event from 18 to 21. Both failed, with the age change falling by a 39-48 vote.

Calloway, after his amendments were defeated, said on the floor that he would not stop fighting for Kentuckians, especially against things that can “destroy people’s lives permanently.”

Time Running Out in Kentucky General Assembly

Supporters of the sports betting bill received good news last week when an advanced agenda for Tuesday’s Senate Licensing and Occupations Committee hearing included HB 551. However, Meredith said , after Monday’s vote, the committee may not take up his bill until possibly Wednesday. The Senate L&O Committee is also expected to take up the gray/skill games bill that passed the House last week and a bill that would legalize medical marijuana.

While Meredith and other supporters express optimism about the bill’s chances, the clock is running out on this year’s session.

The session will conclude on March 29-30.

Another thing the bill has in its favor is Beshear’s support. He campaigned four years ago on legalizing sports betting and reiterated that support earlier this year in his State of the Commonwealth address.

“I don’t think you’re going to see a veto,” Meredith said. “So, I think everybody’s pretty comfortable sitting it down until after the veto period.”

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