Kentucky has prohibited the use of unregulated skill-based gaming machines

Governor Andy Beshear of Kentucky has signed House Bill 594 into law, stating that “Gray machines” are completely unregulated.

After receiving a 29-6 vote in the Senate, Kentucky Governor Andy Beshear signed House Bill 594 into law, which prohibits the use of “gray machines” in the state. Despite his backing for wider legalization of gambling, Beshear believes that these machines, which have become prevalent in stores and bars across the state, do not conform to current regulations.

Beshear emphasized that he supports the introduction of fully regulated and legal casinos in Kentucky. However, he asserted that the gray machines were operating outside the boundaries of the law, without any regulation, taxation, or assistance for individuals who might develop gambling-related issues. He stated that these machines were drawing revenue from Kentuckians and transferring it out of the state.

“I think it’s time we had full-blown casinos in Kentucky, but it’s an industry that absolutely has to be regulated and it needs to be legal. Gray machines are entirely unregulated, and I don’t believe they are legal.

“They came into Kentucky and just set up and were taking dollars from Kentuckians and taking them out of state; with zero regulation, zero taxation, and zero help for those who may develop any issues from using them.”

Critics of the prohibition argued that the bill would adversely affect the numerous small businesses that provide these games. While acknowledging their concerns, Beshear asserted that the law must be upheld. He expressed his hope that in the future, Kentucky Lottery or other options could be explored to supplement the lost revenue and provide alternative sources of entertainment for those who choose to spend their money in this manner. He also stated that such measures could benefit both the state and small business owners.

Kentucky sports betting bill moves forward

Last week, the Senate Licensing and Occupations Committee approved HB 551 with a vote of 9-1, marking the first stage in the Senate for the bill, which was previously passed by the Kentucky House by a 63-34 vote on March 13. The bill, introduced by Representative Michael Meredith in February, seeks to permit retail and online wagering on professional and college sports, international sports, e-sports, and video game events. The minimum age requirement would be 18, and the market would be subject to regulation by the Kentucky Horse Racing Commission.

Under HB 551, nine horse racing tracks in Kentucky would be eligible to obtain sports betting licenses. These tracks would have the option to operate physical sportsbooks on their premises and form partnerships with up to three online sports betting providers. The bill would require initial license fees of $500,000 for tracks and $50,000 for gaming providers. The proposed tax rate for in-person sports betting revenue is 9.75%, while online revenue would be taxed at 14.25%.