Kentucky’s legal sports-betting market had generated $128.2 million in excise-tax revenue by October, after taking $8.4 billion in wagers through Oct. 12. The cumulative tax total, reached a little more than three years after launch, was more than five times the state’s original projection of $23 million in annual revenue at full implementation.
Sports betting began in September 2023, following Gov. Andy Beshear’s signing of House Bill 551 that March. Spectrum News 1 reported that nearly $113 million of the tax receipts had been directed to the Kentucky Permanent Pension Fund, while about $3 million had gone to the Problem Gambling Assistance Account.
The pension fund is housed in the Finance and Administration Cabinet and may be used only for contributions to the Commonwealth’s pension funds, under Kentucky law. Its balances carry forward between fiscal years rather than lapsing.
House Bill 551 dedicated most sports-wagering tax revenue to the pension fund and assigned 2.5% to problem-gambling assistance. The Problem Gambling Assistance Account is publicly funded and administered by the Department for Behavioral Health, Developmental and Intellectual Disabilities. The department’s problem-gambling programme focuses on education about gambling risks and warning signs, access to services and workforce development; the department also reviews research on problem gambling and supports translating it into practice.
The state taxes adjusted gross revenue from wagers placed at licensed tracks at 9.75%, and online wagering at 14.25%. Online betting accounts for the overwhelming majority of activity: Kentucky had 15 retail sportsbook locations in October, but retail sites accounted for nearly 3% of all sports wagers. The licensing structure leaves room for additional sportsbooks.
The funding for treatment and awareness comes as helpline contacts have increased. A Kentucky Council on Problem Gambling presentation to lawmakers projected about 2,532 helpline calls in 2025, including 516 callers seeking problem-gambling services. By comparison, the 1-800-GAMBLER line logged 709 contacts in 2022, before sports betting started.
Monthly contacts rose from 88 in August 2023, the month before legal sports gambling went live, to 243 in October 2023, with reportable services increasing from 23 to 41. The council said contacts had quadrupled and services doubled after launch, although it said the change could reflect either an increase in problem gambling or greater public awareness bringing existing problems into the data.
The Kentucky Horse Racing and Gaming Corporation said the programme had produced positive outcomes for the state and that its role includes protecting bettors and ensuring licensees comply with state law.
