Kentucky Sports Betting: 2.5 Percent of Tax Revenue Slated to Help Address Addiction
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As of September 7th, retail sports betting became the newest form of legalized gambling in Kentucky. Eager bettors will soon also be able to wager on sportsbook apps right from their phones following the launch of online sports betting on Sept. 28.
With the introduction of Kentucky sportsbooks, however, comes the need for enhanced responsible gambling initiatives and problem gambling resources. Here’s a look at Kentucky’s plan for addressing this increased risk of gambling addiction as more individuals partake in different forms of regulated gambling.
Kentucky responsible gambling efforts receive zero state funding
Sports betting may be new for Kentucky, but gambling certainly isn’t.
The lottery and horse race betting have long been legal in Kentucky. And while casino gambling remains illegal, gaming halls are available throughout the state featuring slot-like HHR machines.
Now that retail sports betting is legal, many Kentucky gaming halls and horse race tracks have debuted in-person sportsbooks at their facilities.
Despite Kentucky’s longstanding — and profitable — relationship with gambling, its responsible gambling resources and addiction treatment efforts are surprisingly sparse.
Until sports betting came along, Kentucky problem gambling initiatives received zero funding from the state. Now that legal sportsbooks are in the mix, treatment and recovery efforts are set to receive a breadcrumb’s worth of funding.
Problem gambling initiatives to receive 2.5 Percent of sports betting tax
Kentucky sports betting is expected to be a $23 million annual industry for the state. But Kentucky problem gambling resources will only receive 2.5 percent of that amount.
That equates to roughly $575,000 in the first year.
For reference, regulators in other states allocate anywhere from $0 to more than $3 million each year for problem gambling initiatives. The rest of Kentucky’s 14.25 percent sports betting tax (9.75 percent for retail sportsbooks) will go toward public pension funds.
In Kentucky’s case, anything really is better than nothing.
But unfortunately, this something isn’t nearly enough.
Kentucky initiatives likely won’t see funding until 2025 at the earliest. Wagers must first be placed and accounted for before operators pay taxes to the state. Then, these taxes are held in a fund until annual totals are allocated and expenses deducted.
Some states have yet to divvy out funding.
Current Kentucky Problem Gambling Resources
As of now, Kentucky’s leading problem gambling operation is the non-profit Kentucky Council on Problem Gambling. The organization got its start more than 25 years ago and has been hard at work protecting Kentucky bettors ever since.
The KYCPG uses charitable donations to fund initiatives including:
- annual counselor training conferences
- the 1-800-GAMBLER helpline
- public awareness messaging
- youth awareness curricula
- legislative advocacy for publicly funded problem gambling services
Funding for these efforts comes from individual memberships, conference sponsorships, a grant from the Division of Behavioral Health, and various charitable contributions.
The KYCPG’s largest donor is the Kentucky Lottery, providing $21,000 in FY2020 — more than one-quarter of the council’s $72,100 overall annual budget.
From this perspective, an extra $575,000 in annual problem gambling funding sounds like a windfall.
Only five certified gambling counselors are currently available in Kentucky. A state of Kentucky’s size with the same number of legal gambling options realistically needs 25 or more certified counselors in order to provide adequate assistance.
In anticipation of this increased need, the KYCPG plans to offer counselor training programs starting in 2024 and continues urging at-risk individuals to seek help.
Problem Gambling Likely to Increase with KY Sports Betting Launch
Consensus agrees — Kentucky bettors are inevitably more at risk of developing gambling problems with the launch of legal sports betting. The issue is — there’s no clear estimate on exactly how much problem behavior could stem from the debut.
Kentucky remains confident that funds generated from sports betting taxes will be enough to offer adequate awareness, treatment, and recovery resources.
The Kentucky Council on Problem Gambling isn’t so certain.
KYCPG research suggests that more than 64,000 Kentucky residents are already battling a gambling addiction. Moreover, studies show more than 165,000 people in Kentucky are already exhibiting problem gambling warning signs.
The KYCPG hopes an increase in awareness and an increase in available resources will equate to more of these problem gamblers seeking help.
However, Kentucky sports betting features one added factor unique to most states. Kentucky sports fans can begin wagering three years younger than bettors in most other jurisdictions.
Kentucky sports betting is 18+
Unlike most U.S. states with 21+ age restrictions on legal sportsbooks, Kentucky law permits sports betting for anyone 18 or older.
Wyoming, New Hampshire, and Washington State have similar 18+ regulations.
DraftKings, Bet365, and Circa Sports will all permit 18+ wagering in Kentucky. BetMGM and Caesars, on the other hand, will adhere to 21 and up for all retail and online betting.
This 18+ age limit for sports betting isn’t entirely out of left field. Horse race betting and the Kentucky Lottery are also legal beginning at the age of 18.
Recent studies suggest young bettors between 18 and 22 years old are the most susceptible to risk. And betting is on the rise for this age group.
The KYCPG says it plans to combat addiction by instating effective problem gambling awareness programs at Kentucky colleges.
