Kentucky has entered the online Poker and Sports Betting conversation following the introduction of a bill that seeks to legalize both activities, along with daily fantasy sports, in the Bluegrass State.

The bill, HB 106, was introduced on Jan. 5 and listed three sponsors:

• Rep. Derrick Graham (D)
• Rep. Cherlynn Stevenson (D)
• Rep. Rachel Roberts (D)

All three sponsors are Democrats and hold leadership positions in the Minority Caucus. That will likely work against HB 106. Republicans have a 75-25 advantage in the Kentucky House of Representatives and a 30-8 edge in the Senate. If a sports betting and/or online poker bill is going to land on the desk of Gov. Andy Beshear (a Democrat), Republicans will want to take credit for it.

As such, you can expect the introduction of another sports betting bill (with or without online poker and DFS attached) by a Republican lawmaker soon. That bill is the likely vehicle for Kentucky’s online gambling discussions. 

When the Republican bill is introduced, we will better understand what will be included and whether online poker will make the cut. HB 106 is comprehensive, as it includes online poker and DFS, but to bring enough lawmakers on board, the final legislation may have to be more targeted. 

HB 106 Demonstrates Bipartisan Support

What HB 106 does is show strong support from Democrats regarding legalizing mobile sports betting, online poker, and DFS. The question is, is there enough support among Republican lawmakers?

Beshear supports legal sports betting, saying, “I’m 100% for sports betting,” at a groundbreaking ceremony at Turfway Park in September. “Pushed it every year I’ve been governor and as I was attorney general. Need a few people in the general assembly to come around. There are a whole lot of them here tonight. Hopefully, they like what they see.”

However, Republicans might not want to give Beshear, a Democrat, any legislative victories, as he is up for reelection in 2023. The 2023 legislative session will take place against the backdrop of the Republican gubernatorial primary, which could factor into the House and Senate agendas. 

Dead Cats and Preachers

One of the biggest hurdles any gambling expansion in Kentucky faces is the state’s religiosity. 

According to a 2016 Pew Religious Landscape Study, 63% of Kentucky respondents said religion is very important in their lives, with 75% saying they believe in God with absolute certainty (the sixth highest percentage in the country). 

As former Kentucky Rep. Adam Koenig said more plainly during an NCLGS panel in July, “you can’t swing a dead cat without hitting a preacher in Kentucky.

The Online Poker Fiasco

Kentucky also has a long, strange history with online poker. The state has explored online poker legalization in the past but is best known for a lawsuit it filed against PokerStars – the suit was settled in 2021, with PokerStars handing the state $300 million.

Kentucky used an antiquated law that allows anyone to sue the winner of an illegally placed bet after six months.

Per the Kentucky statute:

KRS 372.020

If any person loses to another at one (1) time, or within twenty-four (24) hours, five dollars ($5) or more, or anything of that value, and pays, transfers, or delivers it, the loser or any of his creditors may recover it, or its value, from the winner, or any transferee of the winner, having notice of the consideration, by action brought within five (5) years after the payment, transfer or delivery? …

KRS 372.040

If the loser or his creditor does not, within six (6) months after its payment or delivery to the winner, sue for the money or thing lost, and prosecute the suit to recovery with due diligence, any other person may sue the winner, and recover treble the value of the money or thing lost, if suit is brought within five (5) years from the delivery or payment.

The suit was first filed in 2008 by J. Michael Brown, the Secretary of Justice and Public Safety of the Commonwealth of Kentucky. In 2015, the Franklin Circuit Court sided with Kentucky and assessed the liability at $290 million, which, when trebled per the Kentucky statute, produced an $870 million bill for PokerStars. 

PokerStars scored a legal victory in 2018 when the Kentucky Court of Appeals overturned the 2015 ruling, calling the judgment “absurd.” The reprieve was short-lived, as the Kentucky Supreme Court (in a 4-3 decision) reinstated the 2015 ruling in 2020. To add insult to injury, the court upped the total due to $1.3 billion, the original amount plus interest. 

PokerStars, now owned by Flutter Entertainment, appealed the decision to the United States Supreme Court. Still, they reached a $300 million settlement with Kentucky, thus ending one of the strangest gambling lawsuits in history and making Kentucky the biggest financial beneficiary of online poker in the U.S., despite not legalizing the activity. 

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