An Overview of Gambling Laws in the State Of Kentucky
For many, gambling and Kentucky immediately inspire thoughts of the world-famous horse race – the Kentucky Derby. Racing is big business in this State, though it is far from the only story when it comes to gambling. The apparent exemption of ‘players’ from the strict anti-gambling laws and the unprecedented seizure of gambling domain names by this State are both unique. This article covers the Kentucky gambling laws in depth.
First up below, you will find a fast-paced history of gambling in the Bluegrass State, from early lotteries through to today’s conditions. After that there is a game-by-game list, along with a legal status for each. Next comes some key quotes from the Kentucky Statutes covering gambling law – before at the end of the page you will find a summary and look into the future.
Kentucky Gambling Laws – A Brief History
The constitution of Kentucky was deliberately given anti-gambling wording to stop the prevalent lotteries of the 1800’s – which were often corrupt. The only form of gambling which has been allowed throughout is pari-mutuel betting on horse and dog races. Kentucky is a world center for the horse racing business, and has been hosting one of the world’s best known and most prestigious races – the Kentucky Derby – since 1875. In addition to the famous Churchill Downs track this State hosts many other first-class racing tracks and venues.
It was not until the 1980’s that gambling was allowed to extend beyond betting on horse races, when the 1988 lottery act was passed. The State lottery is hugely popular today and the profits go to good causes including education. 1992 saw the good causes benefit even more, when charity gambling games were given a carve-out including bingo, raffles and pull-tabs.
The more recent history of gambling laws in Kentucky is the most interesting. In 2008 more than 140 domain names were named as ‘gambling devices’ and seized by the State. While their right to do this was immediately questioned (and many domains returned), the litigation is still ongoing in 2014. This related to the .com extensions, and has forced many gambling site operators to choose alternate domains to avoid any future issues.
This demonstrates that Kentucky are dead serious in their quest to go after the operators of gambling games – whether they be brick and mortar or online. At the same time the rules were softened for participants in these games. You can now use the fact that you were only a player in game as defense in court of law against gambling charges.
What Forms Of Gambling Are Currently Legal?
Casino Games: No, there are no regulated casinos or tribal ones in Kentucky. The best you can hope for here is a charitable ‘casino night’ with minimal prizes for a good cause. Many Kentucky residents cross the border into neighboring Ohio or Indiana to enjoy their tribal and riverboat casinos.
Online Casinos: No, nothing in the current laws mentions the internet, though the seizure of domain names shows clearly that the government believed this to be illegal.
Live Poker: Home games appear to be tolerated, as are free tournaments (no entry-fees) and charity poker games. Players in social games are specifically excluded from prosecution, while the organizers or anyone profiting from these games can find themselves in major trouble.
Online Poker: No, as the seizure of more than 140 gambling domains and suits against some of the major gambling sites show, this State should not be considered as a contender for regulated State poker games any time soon.
Sports Betting: Yes, this is the one exception area in an otherwise generally anti-gambling State. Pari-mutuel betting is allowed – even online via licensed off-track operators. The famous Kentucky Derby and Churchill Downs racetrack has become world-famous, and residents can enjoy betting on events here all year-round. There are also racing video games which allow betting on previously recorded races, though only on-track.
Lottery Betting: Yes, there is a lottery which includes shared games with other States. Profits from this are diverted to education and development causes. There is talk of allowing the purchase of lottery tickets online as soon as 2015.
Bingo Games: Yes, bingo, pull-tabs and raffles are regulated and licensed in this State under a specific charity / good causes carve out.
Kentucky Gambling Laws – Timeline and Key Statutes
The gambling Statutes in Kentucky are very much focused on the organizers of and those profiting from ‘illegal’ gambling activity. So much so that being a mere player in a game is permitted as a defense in a courtroom. One thing that really sticks out from the wording of the legislation is that gambling on games of skill is excluded. For many people, poker would fit in nicely as a ‘game of skill’ under the definition below – this has never been tested in court.
[su_quote]”Gambling” means staking or risking something of value upon the outcome of a contest, game, gaming scheme, or gaming device which is based upon an element of chance, in accord with an agreement or understanding that someone will receive something of value in the event of a certain outcome. A contest or game in which eligibility to participate is determined by chance and the ultimate winner is determined by skill shall not be considered to be gambling. (From 528.010)[/su_quote]
Here is the section concerning being only a player from the same chapter on definitions:
[su_quote](7) “Player” means a person who engages in any form of gambling solely as a contestant or bettor, without receiving or becoming entitled to receive any profit therefrom other than personal gambling winnings, and without otherwise rendering any material assistance to the establishment, conduct, or operation of the particular gambling activity. A person who engages in “bookmaking” as defined in subsection (2) of this section is not a “player. “The status of a “player” shall be a defense to any prosecution under this chapter[/su_quote]
That seems pretty clear, if you are only a player, you do not face the (strict) penalties given to bookmakers, owners of gambling devices or organizers of games who are making a profit. The pattern here is that Kentucky is super-strict in chasing down those offering gambling (especially online), yet fairly relaxed when it comes to playing of these games.
Here are some of the significant dates in the history of gambling in Kentucky.
1875: First running of the infamous Kentucky Derby
1931: Legal challenge to stop horse racing betting fails when the high court rules against claims that this should be banned under the State legislation covering lotteries.
1988: State lottery amendment passed in a Senate vote, the first draw took place one year later in 1989.
1992: Charitable gaming regulations relaxed this includes special events, bingo games and pull-tabs.
2008: Kentucky moves to seize more than 140 domain names from international poker operators. This litigation is still going on today, though the domains are being used by the operators at this point. It is not clear whether an individual State has the jurisdiction to seize domain names.
2010: Separate legal action taken against PokerStars, Full Tilt Poker and the now closed Absolute Poker and Ultimate Bet sites for offering illegal gambling.
2011: A bill to license slot games is voted down in the Kentucky Senate.
Kentucky Gambling Laws – Summary and a Look to the Future
If you are a player in Kentucky then you are free to enjoy horse race betting, charity games, social games and lottery betting too. If you are an organizer of illegal games or the owner of ‘gambling devices’ then you had better be on your guard – the State is relentless in their pursuit of the game operators.
Recent legislative efforts have not managed get far enough to have casinos inside the State borders, which means people continue to cross into neighboring States to enjoy these games. The crack-down on online gambling also shows that Kentucky is unlikely to be an early adopter of regulated online poker games within their State. Like many other States, we will need to revisit this subject once those early adopters are showing steady tax revenues via their online operations.