Horse Tracks will benefit greatly from Kentucky's new sports betting law
The new sports betting legislation in Kentucky is set to change the gambling landscape in the state, providing a boost for local horse racing tracks and online betting platforms. Despite the fact that every wager placed will involve another company besides the betting app provider, the legislation ensures that one of the state’s nine horse racing tracks gets a share of the profits from each bet.
This new legislation allows tracks like Churchill Downs Inc., the state’s largest horse racing company, to profit from online partnerships with platforms like FanDuel. Other tracks are also entering into partnerships; for instance, Keeneland Association announced a partnership with Caesars Sportsbook for online and physical sportsbook operations. However, according to Churchill Downs CEO Bill Carstanjen, while these partnerships provide an “infinite return” since tracks have no costs and yet get a share of the online platforms’ handle, they may not be as lucrative as they seem due to a surplus of licenses relative to leading online sports wagering platforms.
Despite this, Carstanjen sees sports betting as a positive change for Kentucky. It might not bring a significant economic advantage to Churchill Downs, but it could attract customers to their casino-like gaming venues and satisfy the demands of Kentuckians who have been clamoring for legal sports betting.
While the exclusive arrangement for Kentucky’s horse tracks drew attention and criticism for being a form of market control, proponents argue that it mirrors the setup in other states where online sports betting is legally tethered to casinos. Kentucky, however, is a horse racing state, not a casino state, and thus the “tethering” applies to race tracks instead.
Sports betting won’t be legal in Kentucky until regulations are set and licenses are awarded by the Kentucky Horse Racing Commission, an event slated for around the upcoming football season.