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The legal gambling age in Kentucky is set to increase from 18 to 21 after the Kentucky House passed legislation to enforce this change. Additionally, licensed betting companies will be prohibited from offering prediction markets in the state or entering into partnerships with operators.
Currently, Kentucky does not permit esports wagering, but residents can engage in event gambling through prediction market platforms.
HB904 introduces stricter regulations for licensees concerning participation in prediction markets. The bill specifies that licensed sportsbooks, racetracks, and DFS operators are not allowed to partake in or collaborate with platforms offering event contracts through prediction markets within Kentucky.
Potential Exit of Major Sportsbooks from the State
Companies such as FanDuel, Fanatics, and DraftKings, which have introduced prediction market platforms, risk losing their licenses if they engage with these markets. While the bill focuses on Kentucky, it does not explicitly prohibit licensees from operating prediction markets in other states.
Following Nevada’s opposition to prediction markets, FanDuel and DraftKings withdrew from the state, indicating a potential similar response in Kentucky if the legislation is passed.
Underdog, a DFS operator in Kentucky, may also face license issues due to its affiliation with Crypto.com, which has encountered sanctions in Arizona related to prediction markets.
Impact of Gambling Age Increase on Prediction Markets
Although licensed companies are barred from interacting with prediction markets under the bill, platforms like Polymarket and Kalshi could benefit from the rise in the legal gambling age. With the age limit now at 21, younger individuals might turn to these platforms for sports betting.
Recent surveys show that DraftKings remains a preferred platform for sports bettors, but Kalshi is gaining ground. Both Kalshi and Polymarket offer extensive esports markets, unlike licensed sportsbooks in Kentucky.
While no legal action has been taken against these platforms in Kentucky, a lawsuit has been filed against Kalshi in the state. The Kentucky Gambling Recovery LLC alleges that Kalshi is running an illicit betting operation, citing the Statute of Anne, an 18th-century law that allows for the recovery of proceeds from illegal gambling.
Public Support for Higher Gambling Age
Rep. Michael Meredith, the bill’s primary sponsor, noted that despite his personal belief that 18-year-olds should be considered adults, the public has expressed a desire for the gambling age to be raised. The legislation also includes a provision to ban college prop bets on individual college athletes in Kentucky.
Having passed the House, the bill will now proceed to the Senate for approval. Ultimately, Governor Andy Beshear will have the final say in signing it into law.