DraftKings, FanDuel Manage to Avoid Kentucky Crackdown

Kentucky’s crackdown on sports betting just got significantly softer.

DraftKings, Fanatics, and FanDuel used their political power to make crucial revisions to HB 904 last week. The biggest change was the elimination of the bill’s proposal to force out sportsbooks that also offer sports prediction markets in the US. Both industry-leading sportsbooks offer prediction platforms in many US markets, including sports. 

The duo also managed to edit out the section of the bill that would have ended their ability to limit winning bettors.

Kentucky Governor Andy Beshear will now review the bill to decide if he’ll sign it into law.

Kentucky’s Prediction Market Showdown Called Off

The proposed crackdown in Kentucky had captured the attention of the sports betting world over the last two weeks. That’s due to HB 904, which would require sportsbooks to exit the state after one year if they continue operating prediction platforms. Three of the state’s sportsbooks would fall into this category: DraftKings, Fanatics, and FanDuel.

DraftKings and FanDuel own over 70% of the state’s market share, making them the biggest generators of tax revenue in Kentucky. If the bill had passed, it could have led those operators to drop their sportsbooks and replace them with sports prediction markets. 

While state lawmakers acknowledged that risk, they still felt drastic action was needed to fight the controversial industry. However, lobbying by the sports betting industry helped ensure the showdown was called off, avoiding the confrontation the nation had anticipated. 

Sports Won’t Give Up Right to Limit Bettors

While the biggest showdown over HB 904 involved prediction markets, another significant change was made shortly before the bill was sent to the Governor’s desk. 

The state’s top two sportsbooks spent a lot of time and effort to ensure that the bill was also stripped of a key provision involving bet-limiting. If passed, it would have forced sportsbooks to accept wagers of up to $1,000 from bettors in good standing.

The sports betting industry has refused to give much clarity on how and when sportsbooks limit bettors, but the numbers show the tool is reserved for bettors who get hot. That includes those who win several wagers in a row, as well as those who score a big payout from a single bet. 

States have fought hard to end the practice, but sportsbooks insist it is a critical tool to protect their revenue. They have successfully fought off all efforts to restrict it in the US over the years, including in the Bluegrass State.

Bill Will Still Shrink Kentucky’s Market

While the two biggest dangers for sportsbooks have been removed from HB 904, it would still lead to a drop in the sports betting numbers that Kentucky sees. 

The first reason for the impending drop would be the move to raise the minimum betting age from 18 to 21. This will eliminate a group of young bettors who could turn to prediction platforms and not return to the regulated market once turning 21. As a result, the state will see fewer wagers as soon as the change goes into effect.

The other is the proposed ban on in-state college player prop bets. The move comes in response to calls from the NCAA to ban the controversial bet type, which is leading to more harassment of college athletes. With Kentucky being a rare state where college sports are more popular than the pros, the move could lead to another chunk of revenue disappearing.