Potential Changes Coming to Kentucky Sports Betting Ahead of 2025 Kentucky Derby

The 2025 Kentucky Derby is right around the corner. Tens of thousands of fans will flood The Bluegrass State to see the 151st running of the iconic race on Saturday, May 3. When they do, though, the Kentucky sports betting market may be operating under an adjusted set of rules.

If you’re wondering whether that’s even possible, you are most definitely not alone. Under two weeks separate us from the Kentucky Derby at this writing. Can the Kentucky Horse Racing and Gaming Commission, which oversees sports betting, really approve and implement changes that quickly?

It turns out they can. But will they even need to introduce these potential adjustments? And what exactly are the changes being discussed? 

Changes to the Kentucky Sports Betting Market Remain Mysterious

At present, the adjustments possibly being made to sports betting in Kentucky are not public knowledge. All we know for sure is that backers of the proposal are seeking to “expand” The Bluegrass State’s wagering catalog. 

Here is Jori Negin-Shecter of Covers with more on this mysteriousness:

“The KHRGC will consider additions and clarifications to Kentucky’s sports betting catalog.No specifics were released on what could be affected, though timing could be notable given the proximity to the Kentucky Derby. Mobile wagering continues to reshape the commonwealth's sports betting market, allowing for more robust offerings including less popular sports like American Cornhole League. According to a public notice released Monday, the meeting will notably include a ‘request for approval of sports wagering catalogue additions and clarifications,’ though there's no word on specifics beyond that. Currently, the KHRGC allows for a robust offering of markets and wagers, including all four major professional leagues, various NCAA offerings, as well as boxing, eSports, professional cornhole, and of course, horse racing.”

Reading between the lines, this seems like it will be an attempt to increase the number of events available to Kentucky sports bettors. While The Bluegrass State clearly has all the major competitions covered, they may be looking to add more niche sports to the catalog.

Beyond that, this may also be an attempt to broaden NCAA sports betting in Kentucky. As of now, sportsbook customers can bet on college games. But they cannot bet on college player props. 

How Does the Kentucky Derby Fit into All of This?

The ramp-up to this discussion takes place at an interesting time. After all, the state’s hallmark competition, the Kentucky Derby, is basically days away. This is prompting speculation about what the proposal might include. 

Furthermore, Churchill Downs, which is the home to the Kentucky Derby, recently closed their in-person sportsbook. Are these changes aimed at boosting or diversifying the brick-and-mortar operations? We cannot be sure. 

For what it’s worth, at least one key stakeholder dispels this notion. "With 98 percent of sports betting made on mobile platforms such as FanDuel, there simply isn’t a profitable path forward for us to sustain profitability as a retail operator," Churchill Downs racetrack spokesman Darren Rogers explained, per Negin-Shecter. "We’re going to focus our time and resources elsewhere.”

This market-share distribution is not specific to Kentucky sports betting. As online sports betting in the United States becomes more common, the vast majority of customers are turning to mobile sports betting sites. Granted, not every market sees 98 percent of their handle funneled through United States onlines sportsbooks. At the same time, if we had to guess, more than 90 percent of all legal sports bets in the U.S. are processed using a mobile sports betting app.

That can spell doom and gloom for retail operators. Kentucky’s locations are largely immune. The current gaming laws stipulate online sportsbooks partner with licensed retail operators. 

Still, even if the proposed changes are not directly related to the Kentucky Derby, they may be an attempt to capitalize on it.

The Kentucky Derby is a Big Driver of Sports Betting Business…And Not Just For Horse Racing

Every year, people flock to the commonwealth, with a primary goal of betting on the Kentucky Derby. But that is not the only event in which they may be interested. 

Some tourists may not have access to legal sports wagering where they live. Others could simply be fans of different sports. Either way, if you expand the Kentucky sports betting catalog, it creates other ways for them to spend money within the market. 

For instance, during the 2024 Kentucky Derby, there were 156,000 attendees, according to the Courier Journal. The economic impact on the state wound up being around $436 million. To be sure, this is all encompassing. It is not a look at gambling, specifically. It takes into account money spent on food, entertainment, and lodging while in town for the race. But the overarching point stands: The Kentucky Derby is popular enough that it impacts many different businesses. Regulators may believe it works the same way when it comes to sports betting.

Even if it doesn’t, the expansion of bet types can help drive more long-term business. Kentucky sports betting is still in its honeymoon phase. After launching in September 2023, the market continues to routinely break betting handle and revenue records on a monthly basis. This trend seems fated to stick. However, it probably isn’t permanent. The industry will not be considered up-and-coming forever.

Increasing the number of bets that residents can place may help the state weather any pullback in the years to come. If nothing else, it allows operators to cast a wider net. And with a wider net typically comes more business. 

Take a look at this list of the top online sportsbooks so you can find one that works for all of your sports betting needs: