Breakage, sports-betting bills get out of committee in Kentucky
Bills that would eliminate dime breakage on parimutuel bets and legalize sports wagering in Kentucky cleared their first hurdles on Wednesday after passing out of a committee that the sponsor of the bills chairs.
The separate bills passed overwhelmingly out of the House Standing Committee on Licensing, Occupations, and Administrative Regulations, which is chaired by Rep. Adam Koenig, a Republican from Northern Kentucky. Koenig is the sponsor of the bills.
The bill eliminating dime breakage would also standardize the parimutuel tax rate on wagers on Kentucky races at 1.5 percent. That’s a reduction from some tax rates in the past but an increase on the current 0.5 percent tax on account-wagering providers. The 1.5 percent tax would also apply to bets made on historical horse-racing machines, which have been fattening Kentucky purses and racetrack bottom lines over the past several years.
The bill allowing sports gambling in Kentucky is the latest attempt to legalize the practice by Koenig. Prior efforts have failed due to opposition from fellow Republicans, who have a veto-proof majority in both legislative houses. Sports betting is supported by the state’s governor, Andy Beshear, a Democrat.
Dime breakage is the practice by racetracks of rounding payoffs to the nearest 10 cents for each $1 bet. The parimutuel bill will set the breakage rate at the nearest penny, which will increase payouts to bettors. The impact of breakage is highest on bets that have low payouts.