By Daniel Ross
The Kentucky legislature has overridden the governor's veto on a sweeping bill that opens the door to fixed odds wagering in the state and bars a cap being placed on the number of mares bred to a stallion there, among its many facets.
HB 904, first introduced into the state legislature by Republican Representatives Matthew Koch and Michael Meredith, was approved by state lawmakers earlier this month.
Governor Andy Beshear, however, vetoed the bill and issued a statement Monday explaining his decision by arguing the bill would authorize two executive branch agencies (the Kentucky Lottery Organization and the Kentucky Horse Racing and Gaming Corporation) to file emergency and ordinary administrative regulations “without the Governor's review and signature.”
Beshear added, “under the Kentucky Constitution, the Governor is the Chief Magistrate of the Executive Branch and has a duty to ensure all laws are faithfully executed, including by agencies carrying out the law through regulation.
“In that role, the Governor reviews proposed emergency regulations to ensure they are necessary and meet legal requirements for emergency filing. Authorizing an agency to file an emergency regulation in this manner would prevent the Governor from carrying out his constitutional duties and allow boards and agencies to impose rules in Kentuckians without executive oversight, including boards whose decisions impact public safety,” he wrote.
On Tuesday, the state House and Senate voted to successfully override the veto. The House overrode it by a vote of 67 to 7. The Senate voted 26 to 5 to override the veto.
Key Points:
Kentucky overrides veto on sweeping racing bill, clearing the way for fixed-odds wagering and blocking a cap on stallion books.
Fixed odds betting arrives in Kentucky, offering locked-in payouts and aligning the state with New Jersey, Colorado and West Virginia.
Stallion caps effectively barred, preventing The Jockey Club (or any entity) from limiting stallion books in the state.
State can replace registrar if needed, giving officials power to bypass non-compliant oversight bodies.
Legal recourse added for industry, allowing stakeholders to pursue damages if unauthorized breeding limits are imposed.
Unlike the fluctuating odds that make up pari-mutuel betting, fixed-odds wagering is a form of betting in which the payout odds are set and agreed upon at the time the wager is placed. Crucially, they do not change. Kentucky now follows New Jersey, Colorado and West Virginia as states that have legalized this form of betting.
When it comes to the proceeds from fixed-odds wagering, the bill establishes a new “purse stabilization fund” (to supplement existing purses at live meets) that would be supported by a 9.75% tax on fixed-odds wagering revenue made on-track, and a 14.25% tax on fixed-odds wagers made online or via mobile apps.
It also requires tracks and tote companies to adopt new modern technologies to, in part, streamline and expedite betting cycles times. Right now, tote machines across the country update at varying times—typically anywhere between 10- and 30-second cycles.
Some other elements in the bill include a mandate establishing a minimum amount of at least $1,000 that a bettor can win (not how much can be staked or collected ) through fixed-odds wagering, along with language to essentially decouple wagering providers from the prediction market (which is the ability for bettors to make speculative bets on the outcomes of future events).
The bill also ensures that any future Jockey Club effort to impose a stallion cap wouldn't have an effect in Kentucky.
It reads that a registrar of Thoroughbreds “shall not restrict the number of mares that can be bred to a stallion or otherwise refuse to register any foal based upon the number of mares bred to the stallion of the foal submitted for registration,” unless the limitations have first been adopted and implemented by the International Stud Book Committee through unanimous consent.
If any registrar (i.e. the Jockey Club) fails to comply with the requirements of this chapter, “the corporation shall select and utilize an entity to serve as the registrar of Kentucky Thoroughbreds,” the new language states.
Furthermore, the revised bill introduces a pathway for industry stakeholders to seek legal compensation in the event any unauthorized stallion cap is imposed.
“A party aggrieved by a registrar's action in violation of subsection (2)(a) of this section shall have the right to seek any applicable remedy, in law or in equity, against the registrar, as well as be entitled to recover treble damages plus any actual damages sustained as a result of the registrar's actions,” the new language states.
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