Industry Reports

Churchill Downs Remains Front-Runner for Sports Betting Operation License in Kentucky

At a time when Kentucky lawmakers are considering whether to allow sports betting in the state, Churchill Downs has prepared the grounds to become the top competitor for a sports betting operating license in case this form of gambling is greenlighted.

A few days ago, the racetrack owner unveiled its new Derby City Gaming facility in Louisville. The US$65-million facility, situated on 85,000 square feet, offers a 50-seat sports bar featuring a large number of television screens which are to display various live sports events. In addition, around the sports bar, 900 “instant racing” machines are available.

Earlier in September, Churchill Downs has filed an application to the horse racing commission of the state of Kentucky, asking for its approval to operate a US$125-million facility near Hopkinsville. The facility, which is planned to be run in collaboration with Lexington’s Keeneland racetrack, is set to open in 2020 and will offer 1,500 instant racing machines, as well as a 125-room hotel.

Churchill Downs has already revealed that it is open for dialogue on various issues that would be beneficial for the local thoroughbred industry.

Liberalization of Kentucky Gambling Market Could Boost State Revenue

Despite its enthusiasm to be the front-runner for sports betting services operation license in Kentucky, these aspirations of Churchill Downs have faced some criticism from anti-gambling opponents. The latter have claimed that the above-mentioned moves would position Churchill Downs well in case that sports betting is officially permitted at locations such as Derby City Gaming.

The conservative advocacy group the Family Foundation of Kentucky has opposed the expansion of all types of gambling in the state.

Only a few months ago, the long-lasting federal ban on sports betting was lifted by the US Supreme Court. Now, under the US Supreme Court’s ruling, every state will be able to individually make a decision whether to greenlight sports betting or not.

For the time being, the Constitution of Kentucky bans all forms of gambling, except for state- and charity-run lotteries and pari-mutuel betting on horse races. It is not yet clear whether other types of sports betting will be put on a vote as part of a new constitutional amendment, so the fate of sports betting in Kentucky is still to be decided.

According to experts, the addition of other forms of sports betting would bring more revenue to the state, especially in case they are allowed both off- and online. In August, the consulting group REMI revealed that the annual revenue for the state of Kentucky would amount to approximately US$9.4 million in case that sports betting is allowed at brick-and-mortar facilities, including convenience stores and gas stations. On the other hand, should Kentucky see casino gambling legalized, the state’s annual revenue could soar to US$368 million, according to a 2008 Legislative Research Commission study.