Kentucky’s sports betting market is just emerging after launching in September 2023, but the industry’s regulatory agency predates the launch by more than a century. The Kentucky Horse Racing Commission (KHRC), which oversees the state’s horse racing, pari-mutuel wagering, and sports betting verticals, launched in 1906, making it the oldest state-level racing commission in the United States.
In this piece, we’ll explain the responsibilities of the Kentucky Horse Racing Commission, the impact of the agency on the state as a whole, and what other forms of gambling could later fall under the commission’s jurisdiction.
What is the Kentucky Horse Racing Commission?
The Kentucky Horse Racing Commission is an independent state government agency tasked with regulating all horse racing, pari-mutuel wagering, and sports betting activities in KY. It is the oldest such commission in the U.S., having been founded in 1906.
The KHRC is comprised of 15 members, all of whom have been appointed by the Governor of Kentucky.
The Kentucky Horse Racing Commission regulates the following forms of gambling:
There are no full-fledged casinos in Kentucky as casino gambling is illegal under state law. There are also no off-track betting locations in KY. The state lottery is run by the Kentucky Lottery Corporation.
Does the Kentucky Horse Racing Commission regulate online casino gaming?
No, the Kentucky Horse Racing Commission does not regulate online casino gaming. Casino gambling, whether at a brick-and-mortar facility or an online operation, is illegal under state law.
There are two available alternatives to online casino gambling: charitable gambling and playing at sweepstakes casinos. The former is regulated by the Kentucky Department of Charitable Gambling, while the latter is regulated by the Kentucky Lottery.
How can one apply for a gambling license in Kentucky?
There are three types of gambling licenses one can apply for in Kentucky through the KHRC: a Key Employee license, an Information Services Employee license, and a Race and Sportsbook Employee license.
A key employee license is needed for any decision-making personnel. This would include:
An information services employee license is necessary for the following individuals:
Finally, a race and sportsbook employee license is required for these professions:
Applications for each of these licenses can be found at the Kentucky Horse Racing Commission website.
How does the Kentucky Horse Racing Commission ensure responsible gambling practices?
The Kentucky Horse Racing Commission ensures responsible gambling practices in several ways, affecting both betting operators and gamblers.
One such example is by establishing, updating, and monitoring the Kentucky gambling self-exclusion list, which allows individuals who are at risk or are living with a gambling addiction to voluntarily prohibit themselves from gambling activities.
Another case is by crafting rules and regulations for all gambling operators and updating those rules as necessary to protect consumers and maintain a fair playing field. This also includes defining and enforcing consequences for violations of state gambling laws.
What are the penalties for violating gaming regulations in Kentucky?
The penalties for violating gaming regulations in Kentucky are contingent on what violation occurred and who committed the infraction. For example, conducting gambling operations without a license or submitting false information on your licenses is a misdemeanor offense while repeat offenders could face fines, higher misdemeanor penalties, and potentially jail time.
In horse races, the Kentucky Horse Racing Commission has the authority to overturn the results if violations are found. This has happened twice thus far in the Kentucky Derby: the first instance was in 1968, when Dancer’s Image was disqualified after a post-race urine test yielded a positive result for a banned pain relief drug. The other was in 2019, when Maximum Security was disqualified for unfairly impeding an opposing horse during the race.
How does the Kentucky Horse Racing Commission contribute to the state's economy?
The Kentucky Horse Racing Commission contributes to the state’s economy by upholding the integrity of the Kentucky Derby, one of the biggest horse races in the world and the first leg of horse racing’s Triple Crown. According to the Louisville Courier Journal, the Kentucky Derby generates more $400 million in economic impact for the city of Louisville and the state of Kentucky.
But the KHRC’s economic contributions don’t stop there. The commission also collects Kentucky gambling tax revenue from gambling operators and redistributes these taxes to education programs, disaster relief efforts, and responsible gambling initiatives.
