Kentucky Poker Laws

If we had to pick one word to describe Kentucky’s position towards gambling expansion, it would be ambivalent. On one side of the fence, the state’s most powerful horse racing and casino company, Churchill Downs Inc., appears largely in favor of expanding into both the land-based and digital casino realms. Kentucky Governor Steve Beshear also views brick & mortar casinos as a viable and untapped revenue stream.

That being said, the legislation’s position towards Internet gambling is less than favorable – far less. To illustrate: In 2011, the Commonwealth attempted to seize the four biggest online poker sites in the world, under the premise that the state was the sole owner of the property. And three years earlier, the Governor convinced a Kentucky judge to confiscate 141 Internet gaming domains ^[1]; his reason being that online gaming pulled gamblers away from Kentucky’s horse racing and charitable gaming venues.

So where does that leave online poker? Until Kentucky’s gambling interests can first agree on a way to introduce casinos, probably nowhere. And even then, the Governor and at least one State Senator (Mike Wilson) will likely oppose any efforts to bring gambling online.

Then again, Churchill Downs, who also owns poker Bluff Magazine parent company BLUFF Media, is already prepping an online gaming platform. ^[2] And with an online lotto set to go live sometime in 2015, it’s apparent that Kentucky sees at least some benefit in online gaming. Whether that will translate into an online poker legislation push somewhere down the line is anyone’s guess.

Can Players from Kentucky Play Real-Money Online Poker?

Horse racing is the crown jewel of Kentucky’s gambling industry, and in the eyes of government, must be protected at all costs. Unregulated gambling sites, in particular, have witnessed firsthand the lengths Kentucky officials will traverse in order to halt their operations. So instead of dealing with potential seizures and other legal hassles, some US-facing poker sites have opted out of Kentucky. Others simply changed their domain name.

Suffice it to say, finding an online poker site in Kentucky is more difficult than in the average US state. The situation differs in Europe, where players often have access to the best poker sites. And in many European countries, online poker is regulated by government.

Is Online Poker Legal in Kentucky?

Technically speaking, there is no clause in Kentucky’s gambling statutes that explicitly prohibits players from gambling over the Internet, or gambling anywhere for that matter.

Instead, the law primarily targets unregulated gambling operators, and as we’ve already seen, the state doesn’t take too kindly to unlicensed facilities accepting wagers from Kentucky residents.

For better clarity, we first look to how the state defines gambling; Section 528.010(3a):

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.

Although the aforementioned strongly suggests that any game involving even a hint of chance runs afoul of the law, Kentucky actually implements the Dominant Factor Test to determine what is and is not a gambling game. As a game consisting of at least some skill, poker resides in a murky grey area of the law.

In either case, players (defined below) are exempt from criminal liability ( Section 528.010(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 f the particular. The status of a “player” shall be a defense to any prosecution under this chapter.

Advancing or promoting gambling is a different story altogether, with operators facing a myriad of misdemeanor and felony charges depending on the size and type of the operation. Even those who intend to host an unregulated gambling game can be slapped with a Class D felony charge.

The law implies that social poker is an acceptable practice, in so long as the house doesn’t charge fees. And even then, only those profiting from the rake would be at risk.

Kentucky Gambling History

Kentucky’s gambling lore is laced with legends of back alley saloons, iconic gamblers and crooked dealings. But by the late-1800s, it wasn’t Kentucky’s illegal gambling rings that were making headlines, but its newly-minted (legal) pari-mutuel wagering industry.

In 1875, Churchill Downs in Louisville held the first running of the Kentucky Derby. Fast forward a mere three years later, and the masses were placing bets on their favorite pony – a practice that has continued to this very day.

For the longest time, pari-mutuel wagering was the only legal form of gambling in Kentucky. That changed in 1988, when voters authorized via referendum the Kentucky Lottery Commission. The lottery industry started strong and got stronger, contributing $223.8 million to scholarship and grants programs in fiscal 2013 alone. ^[3]

In the mid-2000s, Kentucky legislators began broaching the subject of land-based casinos, with proponents reasoning that the state was losing $500 million in potential revenue to casinos in nearby states. The debate came to a head in late-2013 when Louisville Dem. Larry Clark petitioned for the expansion of five horse tracks into racinos and construction of three standalone gambling facilities.

Unfortunately, for a variety of reasons, support for a constitutional amendment permitting casinos is currently on the decline – although the issue is still on the legislative radar. ^[4]

Regulated Gambling Options in Kentucky

For now, Kentucky casino enthusiasts are best served traveling to either Indiana or Ohio, where commercial casinos have been legitimized. However, those who enjoy horse racing couldn’t live in a better locale. Kentucky also hosts a multi-jurisdiction lottery and a wide array of charitable gambling, which encompasses casino nights.

Other recent headlines

Kentucky is on pace to join the emergent list of states to institute an online lottery. In November 2014, the Kentucky Lottery Corp. met with gaming technological provider GTECH to hash out the details of a computer based system that will enable players to purchase tickets online by fall 2015. ^[5]

In other news, State Senator Mike Wilson is pushing for an amendment to current Kentucky gambling laws that will render unsanctioned Internet gambling illegal. It is presumed that the bill (BR229) will allow for a carve-out for both the online lottery and online horseracing. ^[6]

The Future of Regulated Online Gambling in Kentucky

While some industry analysts place the odds of Kentucky legitimizing online poker on par with a three legged pony winning the Derby, we’d argue that the prospect is not as far-fetched as it initially appears. Remember, Kentucky’s actions against sites like PokerStars and Full Tilt Poker were based on the premise that they were siphoning money from the state’s legal, and tax liable, gambling industry. But what if other states prove that regulated iGaming was a viable revenue stream; one that could complement its brick and mortar gambling landscape? Wouldn’t that prompt Kentucky legislators to take the issue more seriously? Stranger things have happened.

In the coming years, expect Kentucky to measure the performance of its nascent online lottery and the newly embraced Instant Winnings machines. If they outperform expectations, and if Churchill Downs and other pro-casino interests win the fight for land-based casinos, don’t be surprised if someone submits an iGaming bill at some point down the road.