No new takers in Kentucky for sports betting licenses

The roster of online sports betting licensees in the Bluegrass State will remain unchanged for the foreseeable future.

Members of the Kentucky Horse Racing Commission (KHRC) met Monday and approved nine sports wagering service provider permits for 2024, all nine of which were authorized on a temporary basis earlier this year.

“As of the deadline, no additional licensees have submitted service provider applications for conducting sports wagering activities in Kentucky,” KHRC sports wagering director Hans Stokke said. 

A roomy market

By law, Kentucky could have as many as 27 online sportsbooks. In practice, though, the state has eight licensed operators of mobile wagering apps and sites, and only seven are live. Circa Sports is licensed in Kentucky but not yet taking bets, and another service provider licensee, Kambi, is working with retail sportsbook operators.

Monday’s approval means Circa, bet365, BetMGM, Caesars Sportsbook, DraftKings, ESPN BET, Fanatics, and FanDuel are clear to conduct another year of online sports wagering in Kentucky. It also means no new sportsbooks are in the pipeline until further notice.

Kentucky has several brick-and-mortar sportsbooks at racing and gaming facilities in the state as well, such as Churchill Downs. Stokke noted on Monday that the state recently added one more physical sportsbook, as Derby City Gaming Downtown in Louisville opened earlier this month.

It's tough out there

Still, Monday’s vote is a sign of the recent times in the legal sports betting industry. 

Of late, the sector has a few big names (DraftKings, FanDuel) gobbling up most of the market share and a few other big names (ESPN BET, Fanatics) that are just starting to mount a challenge to the duopoly. Smaller brands are under increasing pressure to streamline or shutter their operations, perhaps keeping them on the sidelines in a state like Kentucky. 

The price of admission for Kentucky sports betting for service providers includes an initial fee of $50,000 and a $10,000 annual renewal fee. The state taxes mobile sports betting revenue at 14.25% and retail revenue at 9.75%.

TGL, but TBD

Approximately $295 million was wagered via retail and mobile sportsbooks in Kentucky in October, the first full month of legal sports gambling in the state. That translated into around $53.8 million in adjusted revenue and $7.6 million in tax. Stokke said Monday that preliminary reporting for November shows Kentucky residents wagered more than $260 million during the month.

The KHRC also approved several recommended adjustments to the state’s sports betting catalog on Monday. That included adding NCAA volleyball, Dana White's Contender Series for the UFC, and TGL golf, which won't launch until at least 2025 after the roof collapsed at the proposed venue for the indoor golf league.