With over $2.6 billion in wagers and $43.1 million in tax revenue since legalization in September 2023, the state has proven its appetite for regulated sports wagering in KY. Lawmakers and industry leaders are now reflecting on the achievements and charting a course for continued growth.
The introduction of sports betting in Kentucky coincided with the resurgence of the NFL and college football seasons, driving a 69% month-over-month increase in wagering during September 2024.
The Kentucky Horse Racing Commission reported a handle of $255.9 million for the month, generating $34.3 million in gross revenue with an impressive 13.4% hold rate.
Year-to-date, Kentucky has collected over $28.3 million in tax revenue in 2024 alone, contributing to a cumulative $44 million in state funds since legalization. By law, 94% of the taxes from sports betting go directly toward shoring up Kentucky’s pension fund, a move that has garnered widespread approval.
State Representative Michael Meredith, who sponsored House Bill 551, noted the remarkable financial impact, stating,
“We projected $23 million in tax revenue, but it has more than doubled that with $41.5 million going to the permanent pension fund.”
Leading Operators and Emerging Trends
Online sports betting has driven much of the state’s success, with eight operators combining for $246.6 million in handle in September 2024. DraftKings KY has emerged as the market leader, accepting $100.1 million in wagers, accounting for 40% of mobile betting activity.
With gross revenue of $13.5 million in September, DraftKings is on the cusp of becoming the first Kentucky operator to surpass $1 billion in total handle.
FanDuel KY ranks second with $82.2 million in handle and $12.8 million in gross revenue, while bet365 holds steady in third place with $22.6 million in wagers.
Other key players, including BetMGM and Caesars, have also shown consistent growth, each generating over $1 million in revenue for the month.
Retail sportsbooks have also experienced a surge in activity. Kentucky’s eight brick-and-mortar locations doubled their handle to $9.3 million in September, with Churchill Downs leading the way at $3.8 million.
A Boost to the Horse Racing Industry
The intersection of sports betting and Kentucky’s historic horse racing tradition has proven mutually beneficial. Revenue from historical horse racing machines, which generated $9.6 billion in wagers last year, contributed to $144.7 million in state taxes.
These funds, combined with sports betting revenue, have reinvigorated race purses and breeder incentives.
Jamie Eads, CEO of the Kentucky Horse Racing and Gaming Commission, celebrated the industry’s revival, stating,
“Racing in the Commonwealth has never been stronger.”
Eads highlighted that Kentucky-bred horses won 71% of all rated stakes races in the U.S. this year.
As Kentucky embarks on its second year of sports betting, the foundation appears solid for sustained growth. With industry leaders like DraftKings and FanDuel expanding their presence and retail venues gaining traction, the state is poised to build on its early success.
The dual impact of sports betting and horse racing innovations underscores Kentucky’s emergence as a powerhouse in the national gaming landscape.
