Kentucky Weighs New Rules for Betting and DFS

Kentucky is considering one of the broadest gambling reform bills seen in any state so far this year. A House backed measure would change sports betting rules, bring DFS products under clearer regulation, and try to pull prediction markets into the tax and enforcement picture.

Good to Know

• The bill would raise the Kentucky sports betting age from 18 to 21.
• Sportsbooks would no longer be able to offer individual college player props tied to in state schools.
• Prediction markets would face a 14.25% tax under the proposal, matching the rate used for online sportsbooks.

Kentucky Puts Several Gambling Issues Into One Bill

Rather than focus only on sportsbooks, the Kentucky bill tries to hit several fast changing parts of the market at once. It would raise the minimum betting age to 21, regulate newer DFS plus products from companies such as Underdog and PrizePicks, allow fixed odds horse racing, and set rules aimed at sports related prediction markets.

A ban on individual player props for games involving in state colleges is also part of the package. That would block wagers on player stats tied to schools such as the University of Kentucky or the University of Louisville. NCAA officials have pushed similar limits in other states, although action has been mixed across the country.

The bill does not raise the sportsbook tax rate. Kentucky would keep the 14.25% tax on online sportsbook gross gaming revenue, which is close to the middle of the pack nationally, while applying that same rate to prediction markets operating in the state under the proposal.

Another part could hit some of the biggest brands in the market. The bill would bar sportsbook companies from offering unregulated sports event contracts through prediction market products. According to current reporting, FanDuel, DraftKings, and Fanatics all have exposure on both sides of that line, and together they account for more than 75% of Kentucky sports betting revenue.

The legal fight would not end if the bill passed. Prediction market operators have kept arguing that state gambling law does not control their products, and that larger question is already being fought in more than 20 cases around the country. Most observers do not expect a final answer until at least 2027 or 2028, likely after higher court review.

Kentucky is far from alone here. State lawmakers across the country have been revisiting betting rules as online sportsbooks mature and adjacent products keep growing. A key detail in Kentucky is timing: the House approved the bill by a wide bipartisan vote, and a Senate committee received it last week, although no schedule for further action has been set.