PRIA Logo™
KentuckyHB 5662025 Regular SessionHouseWALLET

AN ACT relating to the Kentucky Horse Racing and Gaming Corporation and declaring an emergency.

Sponsored By: Matthew Koch (Republican)

Became Law

Effective Dates, DelayedEffective Dates, EmergencyGamblingLicensingRacingState AgenciesTreasurerWageringAdministrative Regulations and ProceedingsAmusements and RecreationAuditor of Public AccountsCharitable Organizations and InstitutionsPublic ProtectionAdvisory Boards, Commissions, and CommitteesHorses and Horse Racing

Personalized for You

How does this bill affect your finances?

Personalize government policy and PRIA will tell you what this bill means for your household, plus every other piece of legislation we track. PRIA reads each provision against your financial profile to show you exactly what matters to your wallet.

Free to download

Bill Overview

Analyzed Economic Effects

25 provisions identified: 8 benefits, 4 costs, 13 mixed.

More gaming options for charity fundraisers

Beginning July 1, 2025, schools and school-affiliated groups within a district can use that district's charitable gaming license. Licensed charities can include betting on prerecorded horse races at fundraising events, with games approved by the Corporation. The Corporation cannot ban or restrict games or charitable gaming activities legally approved and in use on July 1, 2025. That protection lasts unless the Kentucky General Assembly takes action.

Breeder funds reserve most money for rewards

The Thoroughbred, standardbred, and Kentucky horse breeders incentive funds must each allocate at least 90% to breeder rewards. Each fund can use up to 10% for Corporation administration and operations. Thoroughbred and Kentucky horse fund rewards cover horses bred and foaled in Kentucky. Standardbred rewards cover Kentucky-bred standardbred horses.

Gaming regulator gains more purchasing options

The Corporation can set its own purchasing procedures through regulations instead of using Kentucky's general public purchasing law. It can include parts of that law in its own rules. It can also use existing state agency price contracts. The law does not state any resulting savings.

More industry voices on gaming board

The Corporation's board grows from 15 to 17 Governor-appointed members. It includes three charitable gaming representatives instead of two, plus one quarter horse industry representative. Retailers leave the financial-interest restriction, while interests above 5% in vendors, suppliers, and related entities remain restricted for members and specified relatives. The Governor appoints the president from up to three board nominees, and the board can remove the president. Specified rules for operations, employee bonds, and contracts now come from the Corporation rather than its board.

Quarter horse racing gets dedicated funding

The law creates a Corporation-run fund to supplement quarter horse race purses. A separate fund supports paint, Appaloosa, and Arabian races. It also sends 1% of wagers on live and historical quarter horse races at a track to the quarter horse development fund. For telephone account, intertrack, and interstate wagers, the host track or race meeting must be for quarter horse racing.

Small charity ticket operations deposit weekly

Qualifying licensed charitable organizations need to deposit gaming receipts only once a week. Their gaming must use only charity game tickets and cannot be part of a charity fundraising event. Their deposits of gross and adjusted gross gaming receipts must total less than $2,500 in the preceding week.

Sports betting money supports gaming regulator

Sports wagering license fees go directly to the Corporation instead of the sports wagering administration fund. The initial track license fee remains $500,000, due before issuance; each license has a $50,000 annual renewal fee. The Corporation also receives 10% of sports wagering administration fund receipts for its operations. Fund money must be distributed as received. The Corporation must report receipts and spending quarterly to the Legislative Research Commission and include them in its annual report.

Thoroughbred fund gains more spending flexibility

Rules for supplemental purses in designated races become optional rather than required. The same applies to rules for the Kentucky Thoroughbred development fund and its Kentucky-bred Thoroughbred program. The law also ends the requirement to pay specified assisting personnel and advisory committee expenses from that fund. It names no replacement funding source or individual award amount.

Gaming employees face charity conflict limits

Beginning July 1, 2025, Corporation employees cannot serve as officers of licensed charities or participate in their charitable gaming. They also cannot hold specified charitable gaming licenses or financial interests in businesses holding those licenses. These limits apply throughout their employment.

Gaming staff lose classified service status

All Corporation employees are excluded from classified state service; previously, the exclusion covered only its veterinarians. They are outside state personnel and compensation laws in Chapters 18A and 64. Applicable state ethics rules still apply unless they expressly conflict with the Corporation's governing law. Beginning July 1, 2025, charitable gaming staff also lose the stated Personnel Cabinet classification requirement. The chief financial officer needs a relevant bachelor's degree and 10 years of finance and accounting experience, including five in senior management. The officer also needs broad corporate-finance knowledge and expertise in corporate finance, auditing, general finance, gaming, or economics.

Gaming oversight loses appeals and safeguards

Retailers lose board appeals when the Corporation's president denies, revokes, or cancels their contracts. The law does not name a replacement appeal route. It removes a specific ban on decision-making staff handling retailer decisions when they hold at least a 5% financial interest. It also removes the two-year ban on former employees representing vendors, retailers, or related entities before the Corporation.

Charitable gaming groups pay receipts fees

Beginning July 1, 2025, licensed charitable gaming groups pay 0.53% of their gaming gross receipts. They remit this fee to the Kentucky Horse Racing and Gaming Corporation. This fixed rate replaces the prior formula for adjustments every two years. Each license fee remains capped at $300. The Corporation can use a graduated license fee scale, but no longer has to.

New deadlines for unclaimed horse bets

Covered winning horse-betting tickets and vouchers held by authorized Kentucky operators are presumed abandoned after one year without a claim. Beginning July 1, 2025, the separate two-year rule for quarter horse and Appaloosa track winnings ends. If no other listed abandoned-property rule applies, the general rule applies instead. That rule uses the earlier of three years after the owner's right to demand payment or when payment becomes due. These rules do not create one uniform extension for all ticket holders.

Racing president controls hiring and pay

The Corporation president can hire, dismiss, take other personnel actions, and set reasonable pay for stewards, veterinarians, and inspectors. Other hires must be essential to a race meeting, serve racing's best interests, and not be otherwise identified in the governing chapters. Rules defining these workers' powers, duties, and qualifications are now optional rather than required. The Corporation still must ensure racing officials receive adequate training.

Charities face annual gaming license renewals

Beginning July 1, 2025, charitable gaming oversight moves to the Kentucky Horse Racing and Gaming Corporation and its gaming office. The old department ends; its staff, equipment, and funding transfer, and the president can combine office duties. The Corporation sets license fee scales and certain raffle application rules, issues final orders, and gains broader rulemaking authority. Its gaming office can inspect and audit licensees' records. Licenses are issued annually, subject to exceptions in KRS 238.530 and 238.545, with terms set to support efficient licensing.

Charities get time to fix reports

Beginning July 1, 2025, timely quarterly reports with the required fee receive review within two months of receipt. For reporting errors that are not willful, the charitable gaming office must warn the group before other administrative action. Groups get 30 days to correct those errors. The office can audit and pursue action for four years after filing. It can pursue action for willful violations at any time.

Gaming officers face changed police powers

Corporation security officers lose their specified peace-officer status on Corporation property and at Kentucky racetracks and grounds. Beginning July 1, 2025, the president can appoint gaming investigators but is not required to do so. Appointed investigators may have statewide peace-officer powers limited to listed gaming laws and related offenses. These include gaming proceeds, fraud, property damage, and felonies on licensed gaming premises. Investigators hired after July 1, 2025, are exempt from required criminal justice training certification, though certification remains available.

Charitable gaming oversight becomes more discretionary

Beginning July 1, 2025, the Corporation no longer has to establish charitable gaming complaint procedures or classify offenses and recommended actions. Rules for bingo card-minding devices and automated charity ticket dispensers also become optional. Dispensers still need prior approval and can operate only at the address on the license. The charitable gaming office's authority over bingo devices and special limited fundraising events is subject to the Corporation's authority.

Existing charity gaming locations get exceptions

Licensees operating more locations than allowed on July 1, 2025, can keep those additional licenses. They lose them after a sale, ownership transfer, or suspension or revocation for a violation. Late renewal applications or fees, or closure for 90 days or more, also end the exception. Failure to meet lease, compliance, access, or reporting requirements also causes loss of the additional licenses.

Gaming regulator must fund itself

After its appropriated operating funds for fiscal years 2024-2025 and 2025-2026 transfer, the Corporation must support itself. State General Fund money cannot then pay or be committed to its expenses. The president must prepare and recommend a budget every year instead of every two years. The Auditor of Public Accounts audits the Corporation every four years, with another qualified auditor auditing each intervening year. The first audit under this schedule covers fiscal year 2026-2027.

Racing funds divide support by breed

The standardbred development fund sends $75,000 each fiscal year to Kentucky's problem gambling assistance account before dividing the rest. At least 90% of the remainder must be allocated in Kentucky; up to 10% can cover Corporation operations. For licensed Kentucky tracks conducting Paint, Appaloosa, or Arabian racing, at least 90% of their purse fund supports racing and purses. Up to 10% can cover Corporation operations, with breed shares based on their contributions. Quarter horse racing is removed from that purse fund.

Racing funds shift to new accounts

State officials must transfer covered balances, carry-forward money, and interest to the Corporation by June 30, 2025. Future receipts go to 18 specified accounts for racing, breeding, worker welfare, facilities, aftercare, research, administration, and charitable gaming regulation. However, the usual transfer of specified racing payments to the Kentucky Racing Health and Welfare Fund excludes two categories. Those exclusions cover payments under Section 10 of this law and KRS 230.398. The law states no total transfer amount or value for the exclusions.

Racing regulator gains licensing rule flexibility

The Corporation can charge racing association application fees, but the law requires no fee and sets no amount. Setting a fee schedule and making pari-mutuel betting rules are discretionary rather than mandatory. Beginning July 1, 2025, it can add license categories for race-meeting activities on association grounds. Those categories apply only to people not already required to hold a license; none is added automatically. It can also regulate horse-racing hubs, including licenses, fees, operating plans, agreements, and wager records.

Racing regulator gains optional rulemaking powers

The Corporation is no longer required to adopt certain racing and wagering rules, but it retains authority to adopt them. These cover improper devices in racing or sports betting and drugs, stimulants, or other improper acts involving horses before races. Rules dividing laboratory and other testing costs among licensed racing associations also become optional. The Corporation can choose whether to define factors for deciding that an administrative appeal is frivolous.

Sports betting rules become discretionary

The Corporation can issue sports betting rules, including rules for credit or debit card deposits. The law makes this rulemaking discretionary rather than mandatory. It also authorizes regulations for a working sports betting system within six months after June 29, 2023. This provision does not set household payments or benefits.

Sponsors & Cosponsors

Sponsor

  • Matthew Koch

    Republican • House

Cosponsors

  • David W. Osborne

    Republican • House

  • Patrick Flannery

    Republican • House

  • Steve Bratcher

    Republican • House

Roll Call Votes

All Roll Calls

Yes: 281 • No: 64

House vote • 3/27/2025

passed

Yes: 72 • No: 22

Senate vote • 3/27/2025

passed

Yes: 30 • No: 6

Senate vote • 3/13/2025

passed

Yes: 75 • No: 11

Senate vote • 3/12/2025

passed

Yes: 31 • No: 7

House vote • 2/21/2025

3rd reading, passed

Yes: 73 • No: 18

Actions Timeline

  1. delivered to Secretary of State (Acts Ch. 124)

    3/28/2025

  2. enrolled, signed by President of the Senate

    3/28/2025House

  3. enrolled, signed by Speaker of the House

    3/28/2025House

  4. received in House

    3/28/2025House

  5. passed 30-6

    3/27/2025Senate

  6. veto overridden

    3/27/2025Senate

  7. posted for passage for consideration of Governor's veto

    3/27/2025

  8. to Rules (S)

    3/27/2025Senate

  9. received in Senate

    3/27/2025Senate

  10. passed 72-22

    3/27/2025House

  11. veto overridden

    3/27/2025House

  12. posted for consideration of Governor's veto

    3/27/2025

  13. taken from Rules

    3/27/2025House

  14. to Rules (H)

    3/27/2025House

  15. received in House

    3/27/2025House

  16. line items vetoed

    3/25/2025

  17. delivered to Governor

    3/13/2025

  18. enrolled, signed by President of the Senate

    3/13/2025Senate

  19. enrolled, signed by Speaker of the House

    3/13/2025Senate

  20. passed 75-11

    3/13/2025Senate

  21. House concurred in Senate Committee Substitute (1)

    3/13/2025Senate

  22. posted for passage for concurrence in Senate Committee Substitute (1)

    3/13/2025Senate

  23. taken from Rules (H)

    3/13/2025House

  24. to Rules (H)

    3/12/2025House

  25. received in House

    3/12/2025House

Bill Text

  • Current

    3/27/2025

    PDF

  • Introduced

    2/14/2025

    PDF

Related Bills

Back to State Legislation