Kentucky Gambling Spend by the Numbers

Gambling is a topic that seems to be gaining increasing importance across the United States with every passing month. That has particularly been the case as the world has started to emerge from lockdown and every state has been forced to confront budget deficits running into the tens of millions. Those states that have gone down the road of legalization when it comes to sports betting and casino gaming are reaping the rewards, while those who have not can see the sums that are there for the taking if they should follow suit. 

Under these circumstances, it is little wonder that the changing attitudes that were already becoming apparent towards betting over recent years have become more prevalent. Indeed, both land-base and online gambling is slowly taking root across the States. A few months ago, we looked at the implications for Mississippi, but it proves equally illuminating by way of comparison to see how gambling spending is changing the neighboring state of Kentucky. 

A conservative approach

Here, lawmakers have taken a similarly conservative approach, despite its historic links with the world of horseracing. However, there are no casinos operating within the state, although it does permit the use of gambling machines, both for gaming and horse race betting, which are placed in non-casino locations. At the time of writing, there are around 3,000 of these machines across the state. 

State lottery – the most popular form of gambling

There is also a state lottery that was first introduced in 1989. More than 30 years on, this has become an accepted leisure pursuit among the adult population, and spending stands at more than $1.1 billion per year. That equates to $307 per adult. Powerball is the most popular game among Kentucky’s lottery players. According to these powerball statistics from SearchLogistics, Kentucky has produced 18 jackpot winners since the game was introduced. That’s more than any other state in the region, making Kentucky a hotbed for lottery luck. These lottery winnings have been life-changing for many people, but also beneficial to the state at large, generating millions of dollars in revenue.

It sounds like a lot of money to spend on the lottery, and it is marginally higher than those in neighboring states like Tennessee, Missouri and Arkansas, where the per capita figure stands at less than $300. However, it pales into insignificance when compared with states like Massachusetts and Rhode Island, where spending is more than $800 per adult per year. Statistics are yet to become available for Mississippi, as the state lottery only launched at the end of 2019.

Online betting

While Kentucky has strict regulations regarding the operation of gambling facilities within its state borders, its laws are silent on the subject of betting online. This has, inevitably, led to various interpretations by those within the industry, and especially by sites looking to attract new players. 

The most common interpretation is that there is no law preventing gamblers within Kentucky from logging on to an online betting platform to place a wager on the Kentucky Derby or the Super Bowl, and similarly, there is nothing to stop them from joining an online casino and spinning the reels or playing blackjack and poker to their heart’s content. 

However, the reality of doing so can be a little different. Even before so many states started to relax their stance on the gambling topic, offshore casinos and sports betting platforms were coming up with these sorts of arguments. The fly in the ointment was always the Unlawful Internet Gambling Enforcement Act of 2006. This has no authority to prevent players or sports fans from visiting these sites, but it does mean that their banks are violating federal law by processing payments to or from them. In other words, logging on and registering is one thing, but actually placing a bet can prove to be something quite different.

Looking to the future

Of course, it doesn’t take a whole lot of imagination to see that there are ways for gamblers in states like Kentucky to use these sites and manage their transactions without the direct involvement of their banks. In fact, this has been one of the driving forces behind the popularity of Bitcoin and other cryptocurrencies as a payment method for online casinos and sportsbooks. 

While some states have attempted to tighten restrictions, there is a growing realization that this will ultimately be as effective as King Canute’s attempts to halt the tide. Earlier this year, Kentucky representative Adam Koenig sponsored House Bill 241, which will seek to legalize online betting for pro sport, college sport, fantasy leagues and poker.

Mr Koenig stressed the point we made earlier that the current prohibitions are easily circumvented. In fact, he said that Kentuckians wager more than $2 billion on sport every year in this way – more than twice the amount that is spent on the state lottery. This means the state is losing out on tens of millions in tax revenue. 

He also pointed out that most neighboring states have some form of gambling, which makes placing a bet even easier, as you need only “drive across a state line or ask a buddy in a neighboring state.” There is no word as yet regarding when the bill will get a committee vote.