The Kentucky House has passed legislation that will raise the legal gambling age from 18 to 21 years old. In addition, the bill will restrict licensed betting companies from offering prediction markets in the state or partnering with operators. 

Kentucky does not currently allow esports wagering, but residents can gamble on events through prediction market platforms. 

HB904 proposes stricter rules for licensees in participating in prediction markets. The bill’s text states 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”. 

Bill Could See Major Sportsbooks Exit State

Companies risk losing their licenses if they engage with the markets. Currently, FanDuel, Fanatics, and DraftKings, which have all launched prediction market platforms, hold licenses in Kentucky. 

The companies have generally not launched these platforms in states with legal online sports betting, and the bill does not specifically say that licensees are forbidden from operating prediction markets in other states. 

FanDuel and DraftKings decided to withdraw from Nevada due to the state’s opposition to prediction markets, and may be pressured to do the same in Kentucky if the legislation passes. 

Underdog, which offers DFS in Kentucky, may also be at risk of losing its license due to its partnership with Crypto.com. The company has faced sanctions in Arizona over its involvement in prediction markets. 

Gambling Age Rise Could Drive Gamblers to Prediction Markets

While the bill restricts licensed companies from doing business with prediction markets, it could actually benefit platforms, such as Polymarket and Kalshi. 

Raising the legal gambling age from 18 to 21 years old could lead to that age group switching to those platforms to place sports bets. 

A recent survey reported that sports bettors still prefer DraftKings as the platform to place wagers, but Kalshi is catching up. 

Both Kalshi and Polymarket also offer extensive esports markets, unlike licensed sportsbooks in Kentucky. 

The state has not taken any legal action against the platforms, although a lawsuit has been filed against Kalshi in Kentucky. A group named the Kentucky Gambling Recovery LLC is alleging that the company is running an illegal betting operation. 

The lawsuit cites the Statute of Anne, an 18th-century law that entitles anyone to claim back proceeds gained from illicit gambling. Similar lawsuits have been filed in six other states. 

Public Wants Gambling Age Raised

Rep. Michael Meredith, the primary sponsor of the bill, said its provisions had been worked on for months. He said that while he believed 18-year-olds should be treated as adults, the public wants the gambling age raised. 

“I’m a strong believer in, if you’re 18 and you’re an adult by every other standard, you should be an adult by all standards,” Meredith told the Kentucky Lantern. “They want the age raised, and so we did it, despite my personal concerns about that.”

The legislation also contains language that would ban college prop bets on individual college athletes in Kentucky. Having passed the House, it will now move to the Senate. If approved there, it will be up to Gov. Andy Beshear to sign it into law.