Kentucky expanded its sports betting market Thursday by offering a customer base most states don’t allow. But the gaming industry is mostly passing on the opportunity to court 18-to-20 year old bettors.
Of the seven digital betting apps that went live in Kentucky Thursday, only DraftKings and bet365 are signing up customers under the age of 21. A third company, Circa, has indicated a willingness to take bets from younger adults, but has yet to launch.
The companies did not respond to questions about their launch strategies.
But industry consultant Brendan Bussmann said online sportsbooks probably decided it wasn’t worth the hassle of modifying data management systems, which are geared to comply with the rules of most states - where 21 is the legal age of betting on sports.
“This isn’t just going in and recoding to say as opposed to 21, it’s 18, because there’s a host of things that go into know your customer provisions off of that,” said Bussmann, managing director of B Global, a Nevada-based consulting firm that advises companies on their launch strategies.
“While they may get a slight edge because of that 18-to-21 segment, those three years aren’t going to make a material difference in their bottom line as it relates to Kentucky.”
Five states, the District of Columbia and Puerto Rico allow sportsbooks to take bets from people over 18. Kentucky represents the biggest opportunity in the nation for digital gaming companies. That's because Kentucky has the largest population except for Washington state, which only allows online bets if gamblers are on the premises of a tribal casino.
Kentucky is surrounded by states where the minimum betting age is 21. Ohio’s Casino Control Commission has fined several betting apps for marketing to people under 21. Executive Director Matt Schuler criticized Kentucky for opening the market to 18-year-olds.
“The age group that is most at risk of developing a gambling problem are males 18 to 35,” Schuler said. “The younger ones are most vulnerable as they’re not at the age yet where they can thoroughly process the consequences of their actions. Not my opinion. Scientific fact.”
Bussmann disputes that.
“I think the regulator in Ohio needs to worry about regulating Ohio and not a neighboring state,” Bussmann said. “Just because you’re a certain age does not mean you’re going to become an addict over one thing or another, whether that be gaming, alcohol, food or any other addiction that’s out there.”
The Kentucky Council on Problem Gambling hasn’t taken a position on the legal age of betting. But it has raised other concerns about Kentucky’s readiness to cope with gambling addiction. Executive Director Mike Stone said annual calls to its 1-800-Gambler help line have doubled to 709 since 2018.
“Gambling disorders apply to about 5% of the population,” Stone said. “Here in Kentucky, if you extrapolate all of that out, (that’s a population) the size of Lexington.”
Stone said Kentucky focused on launching its sports betting industry quickly, without finalizing rules that will be crucial to helping people with gambling problems.
For example, Kentucky’s sports betting statute created the state’s first Problem Gambling Assistance Fund, expected to generate $550,000 a year from 2.5% of sports betting tax proceeds. But Kentucky’s emergency regulations allow the money raised from that provision to be spent on “substance use disorders,” not just gambling.
“Once the funds are diverted, they don’t come back,” Stone said. “We identify enough need now that those funds should be used all for (gambling) services.”
Another example involves the state’s self-exclusion rules. Kentucky’s sports betting statute requires sportsbook operators to compile lists of gamblers who want to ban themselves from betting because they have a problem.
“Right now, it’s not specific that the banning is mandated to be shared among all the facilities,” Stone said. “We are advocating for that.”
The self-exclusion rule also requires sportsbooks to post signs explaining how a bettor can join the list. No signs were visible at Turfway Park or Newport Racing & Gaming when Kentucky launched sports betting on Sept. 8. Newport still hadn’t posted the signs by Sept. 27.
“If we were in a perfect world, every i’s dotted and t’s crossed before anything begins,” Stone said. “But as you well know, we don’t live in a perfect world.”
But that won’t keep young bettors like Owen Stark from taking part of a betting market expected to grow to $40 billion by 2030.
“I’ll probably test it out,” said Stark, a 19-year-old student at Northern Kentucky University. “If I end up losing too much money, I’ll just completely delete the apps and stop betting.”
Stark trusts himself to bet responsibly but doesn’t think it’s wise to let all people his age take such chances.
“18-to-19 year-olds are really not responsible with money,” Stark said. “They could end up with a lot of debt.”
