Year of Publication



Martin School of Public Policy and Administration

Date Available


Degree Name

Master of Public Administration

Committee Chair

David Agrawal

Executive Summary

Kentucky’s legislation legalizing sports wagering in the Commonwealth and delineating its taxation, HB551 of the 2023 Regular Session of the General Assembly, has been implemented and posted numbers in its early months that suggested it will exceed revenue projections for the Commonwealth. Researchers have raised concerns, particularly in studying West Virginia, which implemented similar legislation in 2019, that sports betting may be cannibalizing existing gambling revenue for states that implement it. However, this was not conclusive. While evidence from West Virginia suggests that sports betting may be cannibalizing existing revenue, evidence from Kentucky and the individual and broader regional trends of other states bordering the Commonwealth provide contradictory evidence. Over the period from FY2018 to FY2023, Kentucky and its neighbors have instead broadly tracked with one another and with broader national economic trends that witnessed a downturn related to COVID-19 followed by record-breaking revenue growth. This growth happened regardless of whether the state implemented new revenue streams during that period, sports betting or otherwise, and in the case of both Kentucky and other neighbors, introducing new revenue streams saw an increase in the rate at which tax revenue from gambling was growing relative to states that did not. Additionally, a qualitative difference-in-difference analysis was performed on Kentucky compared to its neighbor Virginia over the same period, which has similarly strict gambling laws but adopted sports betting within the survey period. This analysis was done in order to predict what may happen in Kentucky beginning in FY2024 based on trends in Virginia. Virginia was selected to compare to Kentucky in order to be able to predict what may happen in Kentucky going forward. The results from this analysis also were not able to prove that sports betting was cannibalizing existing revenue streams in Virginia when compared to Kentucky. Like other states in the region, the evidence from Virginia and Kentucky pointed to larger economic trends observed in both states. Due to this data, it is impossible to conclusively predict that sports betting is or will cannibalize existing revenue streams in Kentucky.

Available for download on Wednesday, May 01, 2024