Kentucky Establishes Problem Gambling Fund Ahead of Sports Betting Launch

Posted on: July 31, 2023, 12:56h. 

Last updated on: July 31, 2023, 02:59h.

Nick Juliano Read More
Expertise: Commercial Gaming, Legislation.

Kentucky Gov. Andy Beshar (D) has signed emergency regulations to provide resources to address problem gambling as the commonwealth prepares to launch its new sports betting program.

Kentucky sports betting
On March 31, Kentucky Gov. Andy Beshear (seated) held a ceremonial signing for House Bill 551, which legalizes sports betting in the state. This month, Beshar signed emergency rules establishing a new problem gambling fund required by the law. (Image: Gov. Andy Beshear/Twitter)

The regulations establish procedures for community service organizations or behavioral health professionals to apply for grants from the Kentucky Problem Gambling Assistance account, which was established as part of a sports betting law Beshar signed earlier this year. Funding can be used to provide problem gambling counseling, education, and awareness programs, or to pay for costs associated with treatment and recovery.

“This new industry will bring in more new jobs, tourism, and growth,” Beshear said in a July 27 statement. “But we want all Kentuckians to participate responsibly, and these funds will help support Kentuckians who experience problem gaming.”

$575K to Spend

The fund should total about $575K in its first year. State officials have estimated that legal sports betting will generate about $23 million in annual revenue to start, and the law requires 2.5% of that total to go toward problem gambling issues.

The new account will be administered by the Kentucky Cabinet for Health and Family Services. The department said it expects its costs to administer the fund to be up to $50K per year, enough to pay for half of an average employee’s salary.

100K Potential Problem Gamblers, 7 Professionals to Treat Them

More than 100K adults in Kentucky exhibited problem gambling traits and 45K Kentuckians struggled with gambling addiction, according to data from the Kentucky Council on Problem Gambling cited by regulators. Kentucky’s adult population is just over 3 million, according to census estimates.

Existing resources appear to be sparse. Just seven practicing mental health professionals are certified to treat gambling disorders in Kentucky.

September Launch On Track

Kentucky is aiming to launch sports betting by September 7 to coincide with the start of the NFL season. Nine sportsbook operator licenses will be available, tied to the state’s existing race tracks.

Applicants are required to pay a $500K up-front fee for a sports wagering license. Revenues will be taxed at a rate of 9.75% for in-person bets and 14.25% for mobile sportsbooks.

Beshar, who is up for re-election this November in a closely watched race, has been a strong proponent of sports betting and has said he will place the first bet once sportsbooks open.

The problem gaming regulations will be open to public comment until September 30. The new rules were enacted on an emergency basis, but they will be replaced by permanent regulations following the public comment process.