Kentucky Sports Betting Age Set To Increase To 21 As Prediction Markets Tax Looms

After state lawmakers sent House Bill 904 to Gov. Andy Beshear's (D) desk for formal approval into law, there will probably be significant changes to Kentucky's sports betting market.

The Wagering Consumer Protection Act, or HB904, aims to change how sports betting is conducted in the Bluegrass State.

One of the most important features is that Kentucky would restrict participation to anyone 21 years of age and older, just like most other states that permit sports betting. When it came to permitting anyone over the age of 18 to wager on sports both in person and online, Kentucky stood out.

If Beshear permits HB904 to become law, prop bets involving collegiate athletes—wagers that are only based on the performance of a single player—would likewise be prohibited.

The dominant players, DraftKings and FanDuel, won a significant victory by lobbying lawmakers to remove a condition of HB904 that sought to require sportsbooks to accept bets up to $1,000 on most lines, even though raising the minimum age to bet and doing away with college props will result in revenue losses for the sportsbooks.

The purpose of the amendment was to stop oddsmakers from restricting bettors, a practice that many active bettors have objected to in a number of sports gambling jurisdictions, including Kentucky.

FanDuel and DraftKings Can Sustain Prediction Markets

The sports betting licenses of DraftKings and FanDuel were in jeopardy due to another part of HB904 that was destroyed amid the politicking. A previous version of the law prohibited Kentucky bookmakers from operating a federally regulated prediction market in addition.

Prediction markets are operated nationwide by DraftKings and FanDuel. The clause endangered the leaders of online gaming's future participation in sports betting in Kentucky since they would not have given up on their prediction markets companies in order to keep running online sports betting in the state.

A different bill, House Bill 757, which was also presented to the governor, proposes taxing Kentucky's prediction markets' transaction fees at a rate of 14.25%. Online sportsbooks are subject to the same tax rate.

Kentucky's eight OSBs (online sportsbooks) received almost $2.72 billion in bets during the state's 2025 fiscal year, of which $284.7 million was retained. The majority of the activity was generated by DraftKings, with an estimated gross revenue of $115.3 million, and FanDuel, with $111.7 million.

Horse Betting with Fixed Odds

With Churchill Downs and the Kentucky Derby, Kentucky is the heart of the American horse racing industry. The introduction of fixed-odds horse racing betting is recommended by HB904.

Similar to sports betting, fixed-chances wagering enables bettors to wager against the track, in contrast to parimutuel wagering, where a bet's odds change until the starting gate dependent on the pool. Fixed-odds offers bettors payout guarantees and certainties that are unaffected by subsequent events.

A 15% tax on gross earnings from fixed-odds wagering on live horse racing is proposed under HB904. Fixed-odds, according to many tracks, modernize horse racing and attract younger, more astute bettors who want to lock in odds.