Kentucky legislature passes bill to allow fixed-odds betting

Kentucky's legislature passed a bill that would allow fixed-odds wagering in the state and would ban a cap on the number of mares a stallion can cover.

The bill will be sent to Gov. Andy Beshear, a Democrat, but the Republican supermajority in the legislature could override a veto.

The bill would impose a 9.75% excise tax on fixed-odds wagers made at a track and 14.25% at wagers placed online and will be used to supplement purses.

The stallion cap comes in response to a proposed rule that would have limited stallions born in 2020 or later to 140 mares per calendar year in the U.S., Canada and Puerto Rico. The rule, intended to address concerns about inbreeding, was rescinded after legal challenges. The bill requires that any registrar of Kentucky-breds not impose a cap on the number of mares a stallion can be bred to unless members of the International Stud Book Committee unanimously agree on a cap.

The bill prohibits tracks and sports-wagering operations from participating in prediction markets.

Louisville Public Media reported that some lawmakers were concerned that this could prohibit companies like Churchill Downs from airing the Kentucky Derby on NBC if the network sold ads to sites such as Kalshi or Polymarket.

“The possibility that a signature industry – not just in Jefferson County, Louisville but in Kentucky – that a central brand cannot project itself potentially on national advertising media, that’s serious stuff,” Democratic Senator Gerald Neal of Louisville said, according to LPM. “There’s no way I could support this without a clear answer that suggests that will not be the outcome. That’s like sticking a gun up to your head economically.”

LPM also reported that Churchill Downs issued a statement saying the company would work with the governor and lawmakers to “correct language that could adversely impact” Kentucky’s horse racing industry and expressed confidence that those changes will be made in the last two days of the session.

The legislature returns April 14 and 15 to wrap up the session.