Since the launch of legal sports betting in Indiana in 2019, the market has benefited from the lack of legal betting in the bordering states of Ohio and Kentucky. Last year, the state’s gambling industry boomed, setting new revenue records.
This year, however, brought a changing landscape that has taken the state’s revenue potential down a notch. Indiana sportsbooks and casinos face new competition, especially along the state’s borders where neighboring states’ gambling markets are evolving.
Most notably, Ohio launched legal sports betting in January, which has put a dent in the Hoosier State’s online sportsbook handle as western Ohio sports bettors can now wager within their home state. The sports betting market has seen declines in year-over-year revenue for nine months straight.
Yet another neighboring state is jumping on the sports betting bandwagon soon. Kentucky will be the newest state on board when retail sportsbooks begin to open in time for the NFL season on Sept. 7, and online options follow shortly after.
Kentucky’s sports betting market is projected to develop into a $2 billion industry, which would put it around half the size of Indiana’s. As Indiana’s market is somewhat mature, the effect of the Kentucky market will be relatively minimal, but it will help nudge the current trend of market shrink in Indiana.
Controversial decision puts KY at odds with neighboring states
Kentucky will be one of only five states with an 18-year-old minimum age for sports betting, compared to the majority of states that require bettors to be 21 or older. Kentucky officials aligned the minimum age with other gambling options like horse betting and the lottery, which also have an 18-year-old minimum age.
This opens the door for 18- to 20-year-olds in Indiana to legally bet on sports if they cross the southern border. The same is true in Ohio, where regulators have expressed concerns.
Matt Schuler, the executive director of the Ohio Casino Control Commission, has been vocal about his opposition to Kentucky’s age minimum. He cited research showing that younger adults are at higher risk of developing gambling problems. A national survey conducted in 2021 by the National Council on Problem Gambling (NCPG) revealed that 18- to 24-year-olds lacked an understanding of the true risks involved in gambling.
Which online sportsbooks will be available in KY?
As of now, two sportsbooks have announced partnerships for the Kentucky online sports betting marketplace. Those are Caesars Sportsbook (via Keeneland and Red Mile) and FanDuel Sportsbook (via Churchill Downs).
However, DraftKings, one of the leading sportsbooks in the country, has yet to finalize its plans for Kentucky. While DraftKings is already partnered with Churchill Downs for its horse betting app, DK Horse, its partner for Kentucky’s online sports betting platform remains unknown.
As for other top operators that could come online in KY, there are a few likely players.
- BetMGM Sportsbook is live in Indiana and Ohio and has had a huge advertising presence in the region. It would not be surprising to see BetMGM launch in the Bluegrass State.
- Bet365 Sportsbook is lesser known across the U.S., but it’s a popular option in Europe and operates in four U.S. states. In Ohio, Bet365 went big with promotional spending and became the third-largest sportsbook in that state. The app also operates in Virginia, so a KY expansion could be imminent.
- The 18-plus betting age in KY could be a good fit for Barstool Sportsbook, as the Barstool brand enjoys popularity among a younger demographic. Barstool also creates some content centered around the Kentucky Derby, and founder Dave Portnoy has been known to visit Churchill Downs on occasion.
The king of sportsbooks yet to find its throne in Kentucky
When Churchill Downs Inc. applied for retail sports betting licenses, it indicated that FanDuel Sportsbook won’t be its only partner. This leaves room for DraftKings to potentially join Churchill as another partner. But DraftKings might be exploring other options that keep the sportsbook completely independent from FanDuel.
One possibility is that DraftKings is in negotiations with Revolutionary Racing-owned Sandy’s Racing & Gaming in Ashland, which has expressed interest in partnering with one of the “big four” sportsbooks.
Though it hasn’t announced a partnership yet, DraftKings could be in a unique position to dominate the KY market. In Indiana, DraftKings pulled into the No. 1 spot to lead the market in June, with $88.9 million in handle compared to FanDuel’s $69.7 million. The big two sportsbooks will lead the way in Kentucky as well, and DraftKings might have the edge over FanDuel there, too.
That’s because DraftKings seems poised to capitalize on the lower legal gambling age in Kentucky, whereas Caesars, for one, has committed to keeping the age requirement for its sportsbook at 21 and up. FanDuel and BetMGM are likely to do the same — they don’t allow under-21 betting in states where they could.
DraftKings currently allows 18-and-over bettors in New Hampshire and Wyoming, where it’s legal to do so. Doing this in Kentucky would open up a whole market segment for DraftKings, which would include not only the state’s youngest adults but also those from neighboring states, like Indiana, who feel compelled to cross the border to gamble.
Kentucky retail sportsbooks, horse tracks could be draws for 18+ bettors
DraftKings won’t be the only option for potential 18- to 20-year-old bettors, though. Other apps with a smaller market share in Kentucky will have an incentive to open their books to the younger age group.
In addition, most if not all horse tracks and other gaming locations in Kentucky will offer brick-and-mortar retail sportsbooks.
The legal gambling age at racetracks is already 18-plus, so some or all of these locations will likely go 18-and-up in their sportsbooks.
