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Kentucky regulators new igaming apps

Kentucky Regulators Prepare for Wave of New IGaming Apps

by Martha Simmonds

In 2022, the gaming industry in the USA was valued at a staggering $63.53 billion, with projections suggesting it will continue to grow annually, reaching a staggering $153.57 billion by 2030. With the evolving iGaming landscape, Kentucky, a state known for its rich gaming heritage, finds itself at a crossroads.

Kentucky lacks land-based casinos or tribal gaming facilities, relying solely on horse racing, pari-mutuel wagering, charitable gaming, and the state lottery as legal forms of gambling. However, the state faces a surge of illegal and unregulated gambling activities, including offshore online platforms and “gray machines” resembling slot machines. To counter this, Kentucky regulators are preparing for the legalization of iGaming, a move that could bring substantial economic benefits and job opportunities to the state.

What is the current situation of iGaming in Kentucky?

Kentucky is one of the few states with no land-based casinos or tribal gaming facilities. The state’s only legal forms of gambling are horse racing, pari-mutuel wagering, charitable gaming, and the state lottery. However, there are also many illegal or unregulated gambling activities in the state, such as “gray machines” that resemble slot machines, offshore online platforms, and bookies.

The state has been trying to legalize sports betting for several years, but the efforts have faced opposition from some lawmakers and interest groups. In 2020, a sports betting bill passed the House but stalled in the Senate. In 2021, another bill was introduced to allow most forms of sports betting in the state, including online and mobile platforms. The bill would also regulate the taxation of all types of online gambling, including online poker and fantasy sports. The legislature has not yet voted on the bill.

Meanwhile, the Kentucky Horse Racing Commission (KHRC) has announced that it will review proposed regulations for legal sports betting in the state on Monday. The regulations would cover licensing, fees, taxes, integrity, consumer protection, and responsible gaming. The KHRC has the authority to regulate sports betting under existing laws that govern horse racing and pari-mutuel wagering.

As for online casinos, there is no active legislation to legalize them in Kentucky. However, a New York Senator has introduced a bill allowing iGaming operators to offer their services in New York. The bill has reached the New York State Senate Racing, Gambling, and Wagering Committee, which could set a precedent for other states to follow suit.

What are the potential benefits of legalizing iGaming in Kentucky?

Legalizing iGaming in Kentucky presents a promising opportunity to bolster the state’s revenue streams. According to projections, legal sports betting could generate $22.5 million in annual tax revenue for the state. Additionally, online casinos could generate even more revenue, operating at higher margins than sportsbooks. For instance, New York could earn $475 million annually by taxing online casinos at 25%.

Besides the financial benefits, legalizing iGaming could create numerous job opportunities and stimulate economic growth in Kentucky. The industry’s expansion would create jobs for operators, suppliers, regulators, and service providers, boosting employment prospects in various sectors. Moreover, this development could attract new investments and businesses, fostering a dynamic economic environment within the state’s gaming industry.

Legalizing iGaming can help mitigate illegal or unregulated gambling activities. Offering legitimate and regulated Kentucky betting apps reduces the demand for illicit gambling services outside the state’s jurisdiction and oversight. This, in turn, could aid in curbing criminal activities associated with unregulated operations, such as money laundering and fraud.

In addition to the economic and regulatory benefits, the horse racing industry in Kentucky stands to gain substantial support from iGaming legalization. The increased interest and fan engagement that come with legal iGaming could bolster horse racing events and strengthen the industry, contributing to its continued growth and sustainability while preserving an essential part of Kentucky’s culture and economy.

What are the potential challenges of legalizing iGaming in Kentucky?

Legalizing iGaming in Kentucky may encounter obstacles in the form of legal or political opposition. Some lawmakers, interest groups, or voters might be against gambling expansion due to moral or religious objections. Additionally, legal challenges could arise from the federal government or other states with differing gambling laws and regulations, adding complexity to the legalization process.

Another challenge that Kentucky might face is competition from neighboring states that have already legalized or are planning to legalize iGaming. States like Indiana, Illinois, Tennessee, West Virginia, and Virginia have ventured into legal sports betting and online casinos, potentially attracting customers and revenue away from Kentucky. To remain competitive, Kentucky may need to ensure that its iGaming products and services are appealing and on par with those offered by neighboring states.

The increased prevalence and accessibility of gambling could lead to gambling addiction, financial strain, crime, family conflicts, and even suicide rates. Managing these social and public health implications will be vital to ensure the well-being and safety of the state’s residents.

Legalizing iGaming involves balancing the interests of various stakeholders, each with its expectations and concerns. Stakeholders may include operators, regulators, consumers, lawmakers, interest groups, and the general public. Addressing the needs of different population segments, such as minorities, women, youth, seniors, veterans, and low-income groups, is essential to ensure that the benefits and risks of iGaming are fairly distributed and that the industry operates responsibly.


The outlook for the future of iGaming in Kentucky is uncertain but promising. The state has a strong potential to become a leading iGaming market in the US, given its large population, high demand for gambling, and rich gaming heritage. However, the state also faces significant hurdles before legalizing and launching iGaming.

The fate of iGaming in Kentucky largely depends on the actions and decisions of the state’s regulators and lawmakers. The KHRC’s review of the proposed sports betting regulations is a positive sign that the state is moving forward with its plans to legalize sports betting. However, the bill that would authorize sports betting and other online gambling still needs to pass both chambers of the legislature and get the governor’s approval.

The state could also benefit from following the example of other states that have successfully legalized iGaming, such as New Jersey, Pennsylvania, Michigan, and Connecticut. These states have shown that iGaming can be a profitable and sustainable industry that can generate significant revenue for the state budget, create new jobs and economic opportunities, enhance consumer protection and responsible gaming, reduce illegal or unregulated gambling, and support other gaming sectors.

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