Kentucky Releases Sports Wagering Regulations + License Applications Info

Kentucky’s sports wagering regs are split into emergency regulations and ordinary regulations. Emergency regulations are effective as of July 10 and will eventually be replaced by the corresponding ordinary regulations.

Service Provider License

Service provider license means a license granted to a service provider that has a contract with an operator to provide sports wagering services.

An applicant shall submit the initial fee of $50,000 with an initial application for a service provider license.

A service provider shall submit the renewal fee of $10,000 with a renewal application for a service provider license.

The commission shall grant a service provider application if the commission determines that the applicant’s participation as a sports wagering service provider is in the best interests of sports wagering in Kentucky. The commission shall consider a number of factors, including whether the applicant’s key persons and substantial owners qualifies to receive applicable occupational licenses and whether the applicant demonstrates a level of skill, experience, knowledge, and ability necessary to operate as a service provider, and whether the applicant has at least one contract to provide services to a sports wagering operator.

The commission may grant a temporary license.

The commission may change a temporary license into an annual license if:

• All investigations into the license application are complete;
• The commission is satisfied the holder of a temporary license qualifies to hold an annual license; and
• The applicant, its parent company, or affiliate subsidiaries have demonstrated that it is licensed to provide gaming services in at least three other United States gaming

Occupational Licenses

There are a couple of different categories of occupational licenses:

(a) Race and Sportsbook Employee License;
(b) Information Services Provider:
(c) Key Employee.

All business entities that provide information services to sports wagering licensees in Kentucky shall obtain an Information Services License, such as:

• Sports Wagering Oddsmakers or Traders;
• Sports Wagering Data Source;
• Sports Wagering Risk Management;
• Sports Wagering Player Account Management; and
• Sports Wagering Platform Providers, including geolocation technology, Know Your Customer, or sports wagering equipment manufacturer.

Key Employee License is a category of occupational license, which is required for all significant employees working for an operator or a service provider who have substantial decision-making power. Each person applying for a license in the Occupations Licenses regulation that is not an individual shall designate an individual with decision-making authority for its day- to-day operations to apply for a key employee license. Additionally, a licensed sports wagering business operating in Kentucky shall designate a supervisor for the following areas to apply for a key employee license:

1. Compliance;
2. Trading;
3. Customer Service;
4. Finance and Audit;
5. Risk and Payments; and
6. Information Technology.

Race and Sportsbook Employee License means a category of occupational license, which is required for several categories of individuals that are listed in Section 6 of the Occupational Licenses regulation.

Fees

Race and Sportsbook Employee License: $150; Information Services Provider: $5,000; Key Employee: $1,500.

All occupational licenses shall be renewed annually. The renewal fee for each category shall be the same as the initial licensing fee.

An applicant for a Racing and Sportsbook Employee License or an Information Services License shall include with its application an agreement or statement of intent indicating that a licensed operator or service provider shall utilize the applicant for the provision of goods and services. For 2023, the agreement or statement of intent supporting the applicant’s claims may come from a person applying for an operator or service provider license.

The commission may issue a temporary license, which is a provisional license granted by the commission during the process of evaluating an application for a permanent license.

The commission may issue the applicant a temporary license if the application and a criminal history check completed by the commission reveals that the applicant:

• has not been charged or convicted of a felony under state or federal law;
• has not been charged or convicted of a misdemeanor related to gaming; and
• otherwise meets the statutory criteria.

Advertising

A licensee shall not allow, conduct, or participate in any false or misleading advertising or marketing concerning the licensee’s sports wagering operations.

A licensee shall only make representations concerning winnings that are accurate, not misleading, and capable of substantiation at the time of the representation. An advertisement shall be misleading if the advertisement makes representations about average winnings without equally prominently representing the average net winnings of all patrons.

Public Hearing and Comment Period

There will be a public hearing on the regulations on August 22. If you are interested in testifying at the hearing, you must notify the Kentucky Horse Racing Commission in writing five workdays prior to the hearing. Written comments can also be submitted. Written comments will be accepted through August 31. You can send written notification of intent to testify or written comments to:

Jennifer Wolsing, General Counsel
Kentucky Horse Racing Commission
4063 Iron Works Parkway, Building B
Lexington, KY 40511
Email: Jennifer.wolsing@ky.gov

Licensing

The Kentucky Horse Racing Commission has posted links for the application portal and the eServices Portal.

“Links are provided below for businesses and individuals required to obtain a license to operate in Kentucky. Once an application has been submitted, licensees can access their account through the eServices portal.

• New Accounts: Sports Wagering Online License Application Portal
• Account access for sports wagering licenses: eServices Portal
  

Questions about the licensing process or about the application can be emailed to: KHRC.SportsWagering@ky.gov”