KY Rep Files Bills on Sports Wagering, Lower Breakage

In a press conference Feb. 28 in Frankfort, Ky., state Rep. Adam Koenig (an Erlanger Republican) unveiled his latest bill which would allow sports wagering in the state as well as a bill that would see Kentucky lower its breakage on pari-mutuel wagers to a penny.

The Louisville Courier-Journal reported that Koenig planned to file the bills Monday. A bill that addresses tax rates for historical horse racing and pari-mutuel wagering includes the provision to lower the breakage from a dime to a penny. That bill, the sports wagering bill, legislation that would outlaw "gray machines" in the state, and a bill to set up a trust fund to create awareness and treatment for gambling addiction all will be filed under an omnibus bill but also could be considered individually, Koenig told the Courier-Journal at the press conference.

The newspaper reports that Koenig's sports wagering bill would allow such wagering at racetracks, the Kentucky Speedway, and online. That is similar to past sports wagering bills considered in Kentucky, which is now virtually surrounded by states that offer sports wagering or soon will. Missouri is the lone holdout.

"This is freedom," Koenig told the paper. "This is government getting out of the way, allowing adults to make adult decisions."

The Thoroughbred Idea Foundation praised the bill that would lower the breakage rate in Kentucky to the lowest in the country. Currently, Kentucky statute calls for rounding down to the nearest 10-cent figure for every dollar wagered. This results in a payout for a $2 wager that would pay, say $9.78, returning just $9.60.

"This is an exciting step for horseplayers, not only in Kentucky but really anyone in America or around the world who bets into the pools offered on Kentucky racing," said TIF executive director Pat Cummings. "We are hopeful for its favorable passage, and, in the end, that it provides horseplayers with the most substantive reform of breakage provisions in American history.

"It is a great sign that Kentucky is leading the way and we offer our great thanks for the support of Rep. Koenig."

The TIF supports a one-cent breakage. In short, what this would mean is that a current win bet payout that returns $9.60 for $2 could pay $9.78, which for $20 win bettors would result in an additional $1.80 and for $200 win bettors an additional $18.

Last year Kentucky lawmakers took action to protect HHR wagering. HHR revenues benefit tracks, Kentucky purses, and breeder funds. In November, Koenig said he would like to pass legislation—the lower breakage—that would benefit horseplayers.

"In the last few months, we've heard there's really three things we need to make horse racing go. We need the breeders and the owners, we need the tracks, and we need bettors. We've taken care of the first two groups," Koenig said. "As far as I'm concerned we're going to take care of the last group. And this is one of the possible ways--and I think--the easiest and best way to do it."

The Kentucky Horse Racing Commission supports the ban on gray machines. Kentucky racing benefits from legal, regulated historical horse racing games, which resemble slot machines.