Kentucky iLottery Gambling Soars As Sports Betting Legalization Looks Iffy In 2021

The Kentucky Lottery reported significant sales gains in recent months.

According to WTVQ in Lexington, the state lottery reported sales of $579.6 million over a five-month period of July to November. It was an increase of $140.2 million (32%) over the same period last year.

Online gambling and traditional scratch-off games were largely the reason for the huge increase in sales.

Scratch-off ticket sales increased a whopping 35% ($91.5 million) compared to the same period a year prior. Internet gambling on the Kentucky Lottery generated $39.3 million in sales, up 224% year-over-year.

The Bluegrass State has one of the most state-of-the-art online lotteries in the nation, as one of only a handful of states with full-fledged online lottery play.

The big boon for the lottery comes as Kentucky struggles to get sports betting done despite legalization in neighboring states, notably Indiana and Tennessee. The only bordering states that haven’t legalized sports wagers are Missouri and Ohio, and both are considering it.

The Kentucky Lottery is powered by IGT Global Solutions Corp., and the lottery board this month reportedly approved a contract extension with IGT until 2026.

What’s the deal with Kentucky sports betting?

First off, Kentucky is a state without Las Vegas-style commercial casinos and is generally not a very hospitable state to U.S. casino developers.

To complicate matters, the sports betting proposals that have been advanced so far include online poker for the state. It’s a natural fit if the state has online/mobile sports betting apps, but it does appear to be a heavier lift for the state. No state in the country has passed a bill that allows for online sports betting and online poker absent the other iCasino verticals.

In September, the Kentucky Supreme Court dealt a blow to so-called historical racing machines. Addressing their legal status will be a priority for the state legislature in 2021. With that said, sports betting could be included in those policy plans. The slot-like devices at Kentucky tracks see more than $2 billion in annual handle, making them a significant economic engine of existing gambling within the state.

“Historical horse racing is an important part of Kentucky’s economy that supports jobs and contributes over $21 million to the state budget,” Gov. Andy Beshear, who campaigned on casinos for Kentucky, said in a statement after the court ruling. “We are working with various partners to find a path forward.”

It’s also worth noting that Kentucky’s 2021 regular session is slated to wrap up on March 30. The state holds 60-day legislative sessions in even-numbered years and 30-day sessions in the others. The window will be tighter in 2021 than it was in 2020.

And finally, it doesn’t help that Kentucky isn’t home to any NFL, MLB, NBA, or NHL franchises. Those leagues have come to embrace sports wagering since the mid-2018 U.S. Supreme Court ruling that opened up the floodgates for the industry. While there has been friction between the leagues and the U.S. gaming industry, it does hurt Kentucky that there aren’t major pro sports franchises lobbying for sports wagering in the state. Kentucky has strong college sports teams, but the NCAA isn’t a sports betting proponent.

Kentucky has debated whether or not to allow wagering on in-state collegiate teams. As one would imagine, it would be a huge mistake for the market if Kentuckians had to travel to a border state to place wagers on their favorite Kentucky teams. That said, it appears unlikely that Kentucky would move forward with sports betting with such a short-sighted prohibition.