Kentucky officials report $1.48 million in problem-gambling grants as sports betting generates millions

FRANKFORT — State officials told the Budget Subcommittee on Economic Development, Protection, Tourism and Energy that legalized sports wagering has generated billions in wagers and deposited millions into state accounts while the newly created problem-gambling assistance fund has begun awarding grants to build treatment capacity and run targeted education campaigns.

The briefing matters because lawmakers have directed a portion of sports-wagering revenue to help people affected by gambling; the committee sought an update on how much money the state has collected, how the problem-gambling funds are being used and whether the money is reaching people in treatment.

Representatives of the Kentucky Horse Racing and Gaming Corporation and the state Department for Behavioral Health, Developmental and Intellectual Disabilities gave the update. Hannah Sims, director for sports wagering at the Kentucky Horse Racing and Gaming Corporation, said sports wagering deposited $34,840,000 into the state pension fund and about $9,931,000 into the problem-gambling assistance fund in fiscal 2024, the first roughly 10 months of legal operations. Sims told the committee that fiscal 2025 to date adds about $18,500,000 to the pension fund and $556,000 to the problem-gambling assistance fund, bringing the lifetime totals reported in the presentation to “over $53.34 [million] to the pension fund and $1,480,000 to the problem-gaming assistance fund.”

“Sports wagering revenue deposited $34,840,000 in the pension fund and about $9,931,000 in the problem gaming assistance fund,” Sims said. The presenters also reported wagering volumes: from the September 2023 start through December 2024, operators reported roughly $3.5 billion wagered (about $3.39 billion online), and fiscal 2025 to date showed about $1.4 billion wagered.

Patty Clark, director for the Division of Mental Health at the Department for Behavioral Health, Developmental and Intellectual Disabilities, described how the problem-gambling assistance account is being used. Clark said the fund receives 2.5% of the monies the state collects from sports wagering and licensing and that the account supports education, provider training and program development rather than primarily paying direct treatment costs.

“Two and a half percent of the monies received from all sports wagering is included in this fund,” Clark said. She told the committee the department has focused initial dollars on building workforce capacity, creating performance measures and setting up an application review process for grants and contracts.

Clark said the department reported roughly $1,481,000 in the education-assistance fund in materials presented to the committee, and that the office issued notices of funding opportunity in October. The department has received multiple proposals: five for workforce development and training (one awarded, one denied, three pending) and four for public-awareness work (two awarded, two pending). Clark identified two awarded public-awareness projects by name: Project Ricochet of Lexington, which received $100,000 to produce educational multimedia, and Shawnee Transformation Youth Coalition, which received an award (amount in the transcript not specified clearly).

The department also reported operational statistics for outreach and help-line work. Clark said the national problem-gambling helpline number for Kentucky residents is answered by River Valley Behavioral Health in Owensboro and that the state saw 3,240 helpline contacts in 2024, “more than double the previous year.” Clark said roughly 25% of that increase represented people seeking help; the remainder were information requests about online wagering. She added that Kentucky currently has fewer than 10 clinicians certified specifically in problem-gambling treatment and that the state is prioritizing training so general addiction clinicians can screen and treat gambling-related disorders.

Committee members asked whether the helpline collects specific source information (for example, whether callers were harmed by an online sportsbook or an on-site facility). Sarah Cooper, legislative liaison for the department, said the helpline generally lets callers provide what information they wish and that “unless they provide it, we do not collect it.” Representative Whitten asked whether the department can disaggregate calls by venue; Cooper said the data are not presently sufficient to do that breakdown. Representative Lehman pressed for outcome data — whether referrals lead to treatment — and Clark said calls are anonymous and the department is working on ways to track downstream outcomes but does not yet have robust follow-up data.

Committee members also asked whether the problem-gambling fund should reimburse Medicaid for treatment costs. Clark said most direct treatment services are paid through Medicaid or private insurance, and current fund spending is aimed at building provider capacity and public education rather than replacing Medicaid payments. She offered to research Medicaid expenditures tied to gambling-related care if the committee wants that information.

The committee did not take formal votes on the presentations. The chair noted the panel’s offer to provide monthly revenue updates and staff follow-up on questions about Medicaid spending and treatment costs.

The subcommittee did not have a quorum to approve minutes and adjourned; members were told the next meeting is scheduled for Wednesday, Feb. 26.