Kentucky Attorney General Andy Beshear has called on state lawmakers to pass legislation that would legalize gambling in order to create a dedicated source of revenue to support the state’s struggling pension funds.
“The solution is not to cut legally promised benefits, but to create a new stream of revenue dedicated solely to pensions that does not raise any Kentuckian’s taxes,” Beshear said in a letter to members of the state’s general assembly. “The answer should be simple—expanded gaming including casino, fantasy sports, and sports gaming, as well as preparing for the eventual legalization of online poker.”
Beshear cited an August report from the American Gaming Association that said the commercial gaming industry brought in more than $40 billion in gaming revenue from 24 states in 2017, and that those states received over $9 billion in revenue from commercial gaming taxes alone.
He also said Kentucky residents spend an estimated $1 billion or more on gaming in neighboring states like Indiana, Illinois, West Virginia, and Ohio, all of which have legalized casino gaming.
He referred to this as the “leeching” of Kentucky dollars.
“Tax revenues in these states from gaming now total more than $2.4 billion per year,” he wrote. “These states use these dollars—many of which come from Kentuckians—to improve Indiana’s schools, West Virginia’s infrastructure, and these states could even use our dollars to fund their pensions.”
Kentucky’s gambling laws only allow some betting on some horse racing and charitable games, and there are currently no casinos in the state. However, a bill was introduced in January by State Sen. Julian Carroll that would allow betting on sports other than horse racing.
According to the text of the bill, operators would have to pay an initial licensing fee of $250,000, and a 20% tax on gross gaming revenues. The bill also calls for 60% of the funds to go to the Kentucky Employees Retirement Systems Non-Hazardous and Kentucky Teachers’ retirement funds.
“It is time,” Beshear wrote. “I ask that you pass the legalization of expanded gaming and sports betting for the benefit of our pension systems.”