Kentucky Sports Betting Handle Keeps Climbing

Another month, another announcement that the Kentucky sports betting handle continues to obliterate first-year projections.

The Kentucky Horse Racing and Gaming Commission (KHRGC) recently released its end-of-summer report for August 2024. (Remember, these reports are typically a month or two behind). According to their data, sports betting in Kentucky took in $151.4 million of total wagers for the month. That is up 17 percent from July 2024.

This falls short of staggering. But it is nevertheless surprising. The sports calendar for the month of August isn’t too robust. While betting on NFL futures tends to pick up, betting on MLB as well as betting on the WNBA tend to be the biggest draws. Overall wagering typically accelerates in September. That is when the NFL regular season kicks off and betting on the NBA as well as betting on the NHL begin their annual upticks.

It speaks to the interest level in Kentucky sports betting that The Bluegrass State saw such a sizable increase during one of the calendar’s slower periods. Of course, total revenue was down from July 2024, according to the KHRGC. But that says more about the success rate of bettors. Sportsbooks in Kentucky paid out more winning wagers in August 2024 than the previous month. Those ebbs and flows are baked into the legal sports betting experience. Regardless of the profit margin, wagering handles remain a good barometer for participation. And in the case of Kentucky, sports betting engagement continues to be high.

The Kentucky Sports Betting Handle Keeps Exceeding the Most Optimistic Projections

Most recently, the KHRGC announced that the Kentucky sports betting handle cleared $2 billion in less than one year since its launch in September 2023. Optimists initially did not see it eclipsing $1.5 billion to $1.75 billion. After the handle outstripped those projections, many saw the total amount of wagers placed settling in around $2.1 billion for the year.

But it turns out that even those adjusted forecasts were not optimistic enough. As Michael Savio writes at WSN:

“The Bluegrass State is putting its mark on the country’s sports betting map. The Kentucky Horse Racing Commission has reported its handle has now surpassed $2.3 billion, leading to over $37 million in tax revenue after one year of legal sports betting. Those numbers are 60 percent higher than initial projections, showing just how much Kentucky residents have embraced the industry.”

Clearing original forecasts by 60 percent is absurd. It makes you wonder why projections failed to come in higher.

A variety of factors contributed to those original numbers. Chief among them: Kentucky does not have a professional sports team. Horse racing, soccer and betting on NCAA basketball continue to be a draw. But The Bluegrass State is not home to an NFL, NBA, MLB or NHL franchise. That left many wondering whether the popularity of Kentucky sports betting would land on a more modest end.

In retrospect, it does not seem like regulators properly accounted for the importance of online sports betting in the United States. Most wagers throughout the country processed through an online operator. By allowing online sportsbooks to enter the Kentucky market, the state ensured maximum access for potential customers. Sports betting in Kentucky also launched at the start of the NFL regular season. That is yet another factor working in their favor.

What’s Next for Sports Betting in The Bluegrass State?

On the heels of a successful first year, the conversation now shifts to what’s next. For the moment, it isn’t totally clear. However, we do know a couple of things.

First off, more Kentucky sportsbooks are expected to open over the next calendar year. The state has the flexibility to hand out more online licenses, and many expect them to use it. On top of that, Circa Sports opened a temporary sportsbook earlier this year. Their permanent location is on track to be ready by Summer 2025.

Experts, meanwhile, are wondering whether the Kentucky Horse Racing and Gaming Commission may consider raising the sports betting tax. As of now, the state taxes brick and mortar sportsbooks at a 9.75 percent clip. Online operators are taxed at a 14.25 percent rate. Compared to other states with legal sports betting, this is right around the median, if not slightly lower. And given how popular Kentucky sports betting became in Year 1, the state may not have the leverage to hike those numbers.

Will Kentucky Increase Their Sports Betting Tax?

To be sure, Kentucky cannot turn around and triple their tax rate. They do not have the market appeal for such a steep climb. But their current tax rates were negotiated under the guise they would be a more minor market. If the first year returns are any indication, the Kentucky sports betting market will wind up ranking inside the top half of the country when looking at total wagers. That type of demographic is almost assuredly worth more in tax rates.

Whether Kentucky explores this option remains to be seen. It is likely a topic that will not arise until the next legislative session. And even if it is discussed, there is no guarantee it’s acted upon. Nevertheless, it seems safe to say that The Bluegrass State has more options at its disposal than they ever anticipated.

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