Should Kentucky throw out its strict gambling laws?

In the east-central region of the US, the state of Kentucky is famous for a whole host of things. You may know of Kentucky because of its Fried Chicken, world famous bourbon, moonshine, coal or horse racing. But you probably don’t know that Kentucky is also known for having stricter gambling laws than most other US states.

As the American epicentre of thoroughbred horse breeding, betting on horse racing is legal in Kentucky. However, both online and land-based casinos are both illegal – leaving horse racing and lottery tickets as the only means for Kentucky residents to gamble.

Let’s take a look at the strict gambling laws of Kentucky in detail and discuss whether or not there is potential for change.

Gambling and anti-gambling in Kentucky: a time-honoured tradition

Kentucky’s association with gambling stretches back to 1875, when the annual Churchill Downs and the Kentucky Derby were first staged. After visiting the Epsom Derby in England, the grandson of William Clark set out to host a similarly spectacular event in Kentucky.

The Kentucky Derby is still going strong to this day, bringing in $400million in direct gambling revenues, with the horse industry estimated to have a $4 billion benefit to Kentucky. 55,000 jobs are reliant on the Kentucky Derby and the betting industry that accompanies it.

While there’s clearly an audience for gambling in Kentucky, the economic argument behind legalisation of casino gambling in Kentucky has often fallen on deaf ears. Congressmen and lawmakers tend to focus on the moral implication of gambling over the impressive revenue figures that are made year-on-year. The global gambling market is expected to reach revenues of $525 billion by 2023.

The traditionally conservative social beliefs of the Kentucky public has ensured that the local gambling laws have not mirrored the progression of other US states – many of which are understandably keen to cash in on this global trend.

Kentucky and sports betting

The fact that horse racing is so embedded in its culture makes it all the more puzzling why it’s so against other forms of gambling. However, times may be a-changing.

An unofficial panel was set up in mid-2018 by senators in the Bluegrass State to explore the benefits of legalisation.

When lawmakers meet for the start of next year’s legislative session, sports betting is expected to be legalised. Speaking earlier this year, the Kentucky State senator Morgan McGarvey publicly declared they were “definitely having a conversation with all types of entities to make sure we have a full sports betting bill complete with mobile wagering”.

While previous efforts to legalise sports betting in Kentucky have been unsuccessful, the clear success of other states that have done so is expected to influence the decision. Julie Raque Adams, Julian Carroll, Jason Nemes and Kim Moser are all in support of the act, but only time will tell if they are to be successful.

Is Kentucky due a change? A look at gambling in other parts of the world

There have been attempts to legalize gambling in Kentucky recent years – most recently in 2010 and 2012. While those attempts were unsuccessful, many other US states and parts of the world have since been reaping the benefits of their flourishing gambling industries.

Michigan

The Great Lakes State recently followed New Jersey’s example of legalising online gambling activities. In 2013 New Jersey took the step to legalize internet gambling and reported tax revenues of $32 million in the first year.

On top of the clear benefits in terms of the revenue it would earn to reinvest in public services, Michigan senators are expecting this groundbreaking move to also boost jobs. After all, online gambling companies will need to employ more staff in the state to facilitate their online trade.

The move also frees up valuable police resources which were previously used to clamp down on gambling that’s no longer an illegal activity.

It’s expected that more states will follow New Jersey and Michigan and legalise online gambling – particularly due to the Supreme Court’s decision on the PASPA ruling earlier this year, which overturned a previous ban. It was a monumental moment for the future of online gambling in the US, and you can read up about all the ramifications it might have in this insightful article about US sports betting.

The UK

Compared to most other countries, the UK is one of the most liberal in the world of gambling – with a huge industry. Punters in the UK are free to bet on sports, roulette, bingo and slots in casinos and on their mobile phones. Nevertheless, the industry is subject to heavy regulation – with strict rules on underage and problem gambling, as well as money laundering, applying to both online and land-based casinos.

The gross-gambling yield in the UK reached nearly £15 billion recently, with a third of that deriving from the online market. That makes it a valuable source of revenue for the government, which reinvests it in public services such as hospitals, schools and transport.

The benefits of gambling legalisation

While some may believe there are moral implications to legalising the different forms of gambling, if it is regulated properly by the government and the relevant authorities, legalisation can make gambling safe for consumers.

In the UK, all gambling companies are required by law to contribute a percentage of their revenues to gambling charities such as Gamble Aware. This funding helps sustain these charities, keeping them well-placed to help those that may encounter problems with gambling.

Currently in Kentucky, if citizens choose to gamble illegally, they are restricted when it comes to seeking help for their problem because of the current laws.

Similarly, by legalising online gambling in the UK, it’s more able to deal with other issues such as money laundering. Earlier this year, five online casinos were warned they could lose their licences over money laundering concerns – so it’s clearly capable of making operators act more legitimately, and will take action when it’s needed. So if Kentucky wants a more agile, organised and profitable gambling industry, it knows to look to the UK for an example.

In summary

The next six months could prove pivotal in the future of the gambling laws of Kentucky. If precedent is overturned and the state legalises sports betting, then that could open the door to further legalisation across other gambling industries.

However, if it is rejected by lawmakers, then the move to widespread legalisation may not be seen for a generation. This isn’t just an issue in Kentucky, but in the whole of America.

One possible blocker is the fact that one of Donald Trump’s most prominent financial backers – Sheldon Adelson – has several financial interests in the Las Vegas casino industry. Adelson’s opposition to legalising online gambling is likely to influence the government’s stance against the issue.

Meanwhile, supporters of legalisation will have to hope that moves by states such as New Jersey and Michigan will lead to a domino effect of legalisation, eventually spreading to Kentucky state.

( legalisation – we used British version:)