Kentucky House Passes Bill To Overhaul Its Betting Market

Kentucky may be close to taking the war against prediction markets to a new level.

The Bluegrass State’s House passed HB 904 yesterday, which would overhaul its sports betting market. The proposal includes raising the minimum gambling age to 21, banning player prop bets on in-state college athletes, and requiring sportsbooks and DFS operators that also offer prediction markets to exit the market.

The bill will now head to the desk of Governor Andy Beshear for his review and approval before becoming law.

Top Kentucky Sportsbooks May Be Leaving

Kentucky isn’t the first market to set the prediction industry in its sights, but it would be the first to revoke sports betting licenses over it.

On its face, the ban will force operators to choose between exiting the market or abandoning their pursuit of prediction markets. However, if they chose to exit, it could deal a devastating blow to regulated sports betting in the state.

Below is a table showing the sportsbooks currently live in the state, their all-time handle, and their current involvement with predictions.

Source: KHRGC Sports Wagering Report

Proposal Could Boost Prediction Industry

If Gov. Beshear signs off on HB 904, it could have the opposite of its intended effect on the prediction industry.

Sportsbooks that choose to forfeit their licenses could quickly launch sports markets in Kentucky. That would help keep some of their massive user base in the state, taking a chunk out of the regulated market.

By raising the minimum age to 21, the state would also be leaving a group of young bettors unable to place wagers. Prediction markets are not subject to the same age requirement; instead, they set it at 18. That means another chunk of bettors could be forever lost to the prediction industry.

There is also a chance that a ban on college player prop bets involving in-state teams could also drive bettors away. The state’s diehard college fanbases love wagering on their favorite players, which they may still be able to do with prediction platforms. 

Decision Not So Easy for Operators

The expectation is that FanDuel, Fanatics, and DraftKings will all exit the Kentucky sports betting market, instead opting to offer sports contracts. This would allow them to continue offering sports betting without the same rules and regulations as rival sportsbooks.

However, there is reason to doubt those expectations.

While the prediction industry continues to grow, it is facing mounting legal challenges. The White House has offered protection through the Commodity Futures Trading Commission, but that could change after November’s midterm elections. If the Democrats overtake both chambers, it would likely lead Congress to take further action against the industry. 

That means there is a very real possibility that sports predictions are banned or heavily regulated. If that happens, operators like FanDuel and DraftKings may find it difficult to recapture their sportsbooks’ previous success.