Kentucky Governor Andy Beshear vetoed a wide-ranging gambling bill on Monday, citing concerns that the legislation would reduce the power of his office. 

Lawmakers in Kentucky’s House passed HB904 last month, before approving changes made in the Senate at the start of this month. 

Beshear, however, declined to sign the legislation into law, as he said it could result in more changes to the state’s gambling law being introduced without the Governor’s approval.

“I am vetoing House Bill 904 because it would authorize two Executive Branch agencies, the

Kentucky Lottery Corporation and Kentucky Horse Racing and Gaming Corporation, to file

emergency and ordinary administrative regulations without the Governor’s review and signature,” wrote Beshear when issuing a veto message. 

Lawmakers Can Override Governor’s Veto

Ironically, the bill may still be passed without his signature as the Democrat is outnumbered by Republicans in both the House and Senate. 

The Republicans hold 80% supermajorities in both chambers, and only simple majorities in both are needed to overturn Beshear’s veto. 

The Kentucky General Assembly returns Tuesday for the final two days of its session, focusing on veto overrides. 

Bill Could Prevent Esports Betting In Kentucky

Gov. Beshear did not make any comments related to the other proposals in the legislation. The 150-page document would alter several of Kentucky’s gambling laws, covering sports betting and prediction markets. 

One of the most drastic changes is to raise the legal gambling age from 18 to 21 years old. Additionally, it aims to clamp down on sports prediction markets. The two amendments could prevent a large proportion of esports bettors in the state from wagering. 

Currently, sportsbooks do not widely offer esports betting, but prediction market platforms such as Kalshi and Polymarket are available to residents to place wagers. 

The bill aims to stop that, stating that licensed sportsbooks, racetracks, and DFS operators “shall not participate in or contract with platforms that offer events contracts through a prediction market in the Commonwealth of Kentucky”.

If they do, they risk losing their licenses. Currently, FanDuel, Fanatics, and DraftKings, which have all launched prediction market platforms, hold licenses in Kentucky.

Underdog, which offers DFS in Kentucky, has also faced sanctions in Arizona over its partnership with Crypto.com. 

Other States Battle With Prediction Market Platforms

Arizona has taken the fight against prediction markets to new levels by threatening licensees and is the only state to have filed criminal charges against Kalshi. 

A judge, however, blocked the state from enforcing the charges this week following the Commodity Futures Trading Commission (CFTC) filing a lawsuit against the state’s Attorney General and gambling regulator. 

The CFTC also filed lawsuits against Illinois and Connecticut, while Kalshi is now suing Montana’s Gambling Control Division after receiving a second cease-and-desist letter from the regulator. 

Kentucky has not yet taken legal action against any prediction market platforms, but if lawmakers override Gov. Beshear’s veto this week, then the state could join the litany of other jurisdictions fighting court battles.