Kentucky Administrative Regulations
Title 809 - Public Protection Cabinet - Kentucky Horse Racing Commission
Chapter 10 - Technical Criteria
Section 809 KAR 10:002 - Standards for sports wagering
Universal Citation: 809 KY Admin Regs Service 10:002
Current through Register Vol. 51, No. 6, December 1, 2024
RELATES TO: KRS Chapter 230
NECESSITY, FUNCTION, AND CONFORMITY: KRS 230.260(16) requires the corporation to "promulgate administrative regulations to establish standards for the conduct of sports wagering."KRS 230.361 states the "corporation shall promulgate administrative regulations to establish a fully functioning sports wagering system...."KRS 230.808 lists the categories of sporting events that may be wagered upon and allows a sports governing body to submit a request to the corporation to restrict, limit, or exclude a type, form, or category of sports wagering. This administrative regulation establishes standards for sports wagering in Kentucky, including authorized and prohibited sporting events and types of wagers and data sources for sports wagering.
Section 1. Authorized and Prohibited Sporting Events and Types of Wagers.
(1) Sporting events that may be wagered upon
shall include those listed in
KRS
230.808.
(2) Of those events listed in
KRS
230.808, only those categories of sporting
events and their types of wager authorized by the corporation in accordance
with Section 2 of this administrative regulation and posted on the
corporation's Web site may be offered for sports wagering by a
licensee.
(3) A wager that complies
with the criteria established in paragraphs (a) through (d) of this subsection
and that does not involve any criteria listed in subsection (4) of this section
shall be approved and shall not need specific approval under Section 2 of this
administrative regulation prior to being offered by a licensee. A wager under
this subsection shall be based on:
(a) An
outcome or outcomes determined because of a sporting event or sporting events
sanctioned by a sports governing body or equivalent that is approved by the
corporation in the best interests of sports wagering;
(b) Statistical results that can be verified
by a data source, box score, aggregation of box scores, or other statistical
analysis;
(c) The performance of a
single or group of rostered or otherwise registered participants; and
(d) The result of an outcome on the field of
play.
(4) A licensee
shall not offer sports wagering on:
(a) Any
electronic sporting event that:
1. Is not
sanctioned by an approved sports governing body or equivalent; or
2. Has not been approved by the corporation
pursuant to the requirements established in Section 2 of this administrative
regulation;
(b) Any
occurrence of injuries or penalties;
(c) Any officiating decisions;
(d) Any disciplinary proceedings against a
participant in a sporting event;
(e) Any amateur youth sporting events in
which the majority of participants are under the age of eighteen (18) or are
competing on behalf of or under the sponsorship of one (1) or more public or
private preschools or public or private elementary, middle or junior high, or
high schools;
(f) Any sporting
event or type of wager in which the outcome has already been determined and is
publicly known;
(g) Any dog or
horse races; and
(h) Any categories
of sporting event or type of wager until the sporting event or type of wager
has been approved by the corporation in accordance with Section 2 of this
administrative regulation.
Section 2. Petition for a Category of Sporting Event or Type of Wager. Except as established in Section 1(3) of this administrative regulation, all types of wagers and categories of sporting events shall be reviewed and approved by the corporation before a licensee shall be allowed to offer the wager to the public. A licensee may petition the corporation for approval of a new category of sporting event or type of wager.
(1) A proposed new sporting event or type of
wager may be a variation of an authorized sporting event or type of wager, a
composite of authorized sporting events or types of wager, or a new sporting
event or type of wager.
(2) A
petition for a proposed new sporting event or type of wager shall be in writing
and shall include the following information or material as requested by the
corporation:
(a) The name and address of each
petitioner;
(b) The name of the
sporting event or type of wager;
(c) If the sporting event or type of wager is
a variation of an authorized sporting event or type of wager, a composite of
authorized sporting events or types of wager, or a new sporting event or type
of wager;
(d) The name of the
licensee serving as a sponsor of the new sporting event or type of wager
variation petition;
(e) A complete
and detailed description of the sporting event or type of wager for which
approval is sought, including:
1. A summary of
the sporting event or type of wager and the manner in which sports wagers would
be placed and winning sports wagers would be determined;
2. A draft of the proposed wagering rules,
which shall include a description of any technology that would be used to offer
the sporting event or type of wager;
3. Any rules or voting procedures related to
the sporting event or type of wager; and
4. Written attestation that the sporting
event or type of wager meets the requirements of subsection (3) of this
section;
(f) For the
approval of an electronic sporting event, complete information about:
1. Each proposed location of the electronic
sporting event;
2. The video game
used for the electronic sporting event, including the key role of game
publishers as creators of the underlying video game;
3. The electronic sporting event operator, if
the electronic sporting event operator is approved to host events by the video
game publisher, and if the electronic sporting event operator has any
affiliation with the video game publisher;
4. The manner in which the electronic
sporting event is conducted by the electronic sporting event operator,
including electronic sporting event rules; and
5. As required by the corporation,
certification from a third party, such as an electronic sporting event operator
or game publisher certifying that the electronic sporting event meets all event
integrity requirements of the corporation established in KRS Chapter 230 and
KAR Titles 809 and 810;
(g) The name of the sports governing body or
equivalent; and
(h) A description
of the licensee's policies and procedures regarding event integrity.
(3) The type of wager being
requested shall meet the following criteria:
(a) The outcome shall be able to be
verified;
(b) The outcome shall be
generated by a reliable and independent process;
(c) The sporting event generating the outcome
shall be conducted in a manner that ensures sufficient integrity monitoring
controls exist so that the outcome can be trusted;
(d) The outcome shall not be likely to be
affected by any sports wager placed; and
(e) The sporting event shall be conducted in
conformity with applicable laws.
(4) The corporation shall approve types of
wagers and categories of sporting events. The corporation shall consider the
request, all provided materials, and any relevant input from the sports
governing body or equivalent, or the conductor of the sporting event, prior to
authorizing a sporting event or type of wager.
(5) In the best interests of sports wagering,
the corporation may require a test or experimental period before granting final
approval to a sporting event or type of wager. The corporation may subject any
technology that would be used to offer a sporting event or type of wager to
testing, investigation, and approval.
(6) The corporation may grant, deny, limit,
restrict, or condition a request made pursuant to this procedure for reasonable
cause, in order to ensure the integrity of sports wagering in the Commonwealth.
The corporation may issue an order revoking, suspending, or modifying any
approval of a sporting event or type of wager granted under this procedure for
reasonable cause.
(7) The
corporation shall notify all licensees of any additions, deletions, or changes
regarding authorized sporting events and types of wager. Once a particular
category of sporting event or type of wager is approved for its first use, it
may be used on multiple events without further approval. The corporation may
issue general approval for licensees to offer wagers on enumerated categories
of sporting events and types of wagers.
(8) The corporation shall reserve the right
to prohibit the acceptance of any sports wagers and may order the cancellation
of sports wagers and require refunds on any sporting event or type of wager for
which wagering would be contrary to the public policies of the
Commonwealth.
(9) If it is
determined that a licensee has offered an unauthorized or prohibited sporting
event or type of wager, the licensee shall immediately cancel and refund all
sports wagers associated with the unauthorized or prohibited sporting event or
type of wager. the licensee shall notify the corporation immediately after
cancelling and refunding the sports wagers. This notice shall include, without
limitation, which sports wagers were cancelled or refunded and the reasons for
the cancellations or refund.
(10)
The corporation may use any information it considers appropriate, such as
information received from a sports governing body or equivalent, to determine
whether to authorize or prohibit wagering on a particular sporting event or
type of wager, consistent with industry standards.
(11) The corporation may restrict, limit, or
exclude a certain type, form, or category of sports wagering if the corporation
determines that the restriction, limitation, or exclusion is necessary to
ensure the integrity of the licensee.
Section 3. Limitations on Certain Sports Wagering for Good Cause. A sports governing body may submit a request to the corporation to restrict, limit, or exclude a certain type, form, or category of sports wagering pursuant to KRS 230.808.
(1)
The sports governing body shall provide the corporation with notice of a
request to restrict, limit, or exclude a certain type, form, or category of
sports wagering, which shall contain information required by the corporation,
including:
(a) The identity of the sports
governing body and contact information for at least one (1) specific individual
who will be the primary point of contact for questions related to the
request;
(b) A description of the
sports wagering information, event, or wager type that is the subject of the
request; and
(c) Information
explaining why granting the request is necessary to protect the integrity of
the event, or public confidence in the integrity of the event, that is the
subject of the request. This may include information regarding any credible
threat to the integrity of the event that is beyond the control of the sports
governing body to preemptively remedy or mitigate.
(2)
(a) The
request shall be sent to the corporation at least ten (10) calendar days before
the particular sporting event.
(b)
At any time a sports governing body shall report information to the corporation
if the information involves allegations of prohibited activity, such as
match-fixing, the manipulation of an event, or misuse of inside
information.
(3) The
corporation shall request comment from licensees on all requests made under
subsection (1) of this section. The request for comment shall include the date
by which written comments shall be submitted to the corporation.
(4) Pursuant to the criteria established in
KRS
230.808, the corporation shall grant,
provisionally grant, or deny the request.
(5) The corporation may reconsider its
decision if there is a material change in the circumstances related to the
original request.
Section 4. Data Sources for Sports Wagering. A licensee shall report to the corporation in its sports wagering license application, incorporated by reference in KAR Title 809 or 810 KAR 3:010, the data source or sources that it uses to resolve sports wagers. The corporation may disapprove of a data source for any reason in the best interest of sports wagering integrity.
(1) The data source and
corresponding data shall be complete, accurate, reliable, timely, and
available.
(2) The data source
shall be appropriate to settle the category of sporting events and types of
wagers for which it is used.
Section 5. Wagering Rules. The licensee shall adopt comprehensive wagering rules, which shall be approved by the corporation as established in subsection (2) of this section.
(1) The wagering rules
shall be conspicuously displayed on the licensee's Web site or mobile
application and within the race and sports book location, and copies shall be
made readily available to individuals and patrons. Licensees may elect to
display copies of comprehensive wagering rules solely in electronic form on
sports wagering kiosks, if the licensees make hard copies of the wagering rules
readily available to individuals and patrons or display corporation-approved
short-form wagering rules, as established in subsection (2) of this section, in
race and sports book locations.
(2)
The wagering rules shall comply with GLI-33 Standards and shall state the
amount to be paid on winning wagers and the effect of schedule
changes.
(3) The licensee shall not
implement any changes or modifications of the practices, procedures, or
representations upon which the approval of wagering rules was based without the
prior approval of the corporation. Failure by a licensee to act in accordance
with its approved wagering rules may result in disciplinary action.
Section 6. Tournaments, Contests, and Pools.
(1) A sports wagering tournament,
contest, or pool shall not be conducted unless the licensee, before the first
time a tournament, contest, or pool type is offered, files written notice with
the corporation of the licensee's intent to offer that tournament, contest, or
pool type and obtains approval from the corporation in the best interests of
sports wagering. The licensee may file a master list with the corporation to
satisfy this requirement.
(2) The
request shall provide a detailed description of the tournament, contest, or
pool type and shall include the rules of the tournament, contest, or pool, the
requirements for entry, the entry fees, the rake, and potential payouts. The
request shall also indicate if the proposed type involves a shared liquidity
pool available to patrons in Kentucky and other jurisdictions with the prize
pool being comprised of entry fees collected from patrons in multiple
jurisdictions.
(3) The request
shall be submitted to the corporation in writing via electronic mail. All
requests shall be submitted at least ten (10) business days prior to start date
of the tournament, contest, or pool.
(4) Once a licensee receives approval to
offer a tournament, contest, or pool type, the licensee shall not be required
to seek additional approvals from the corporation for each subsequent type that
has only minor variations, such as to the size, number of entries permitted,
entry fee, rake, or prize structure.
(5) Each licensee shall maintain a record of
each tournament, contest, or pool it offers for at least five (5) years. These
records shall include the:
(a) Name or
identification of the tournament, contest, or pool;
(b) Date and time the tournament, contest, or
pool occurred or will occur (if known);
(c) Sporting events and types of
wager;
(d) Rules concerning
tournament, contest, or pool play and participation; and
(e) For each patron:
1. Unique patron identification;
2. Amount of entry fee collected, including
any promotional or bonus credits, and the date collected;
3. Patron scorings or rankings; and
4. Amount of payouts paid, including any
promotional or bonus credits and the date paid;
(f) Total amount of entry fees collected,
including any promotional or bonus credits;
(g) Total amount of payouts paid to patrons,
including any promotional or bonus credits;
(h) Total rake, takeout, or fees
collected;
(i) Funding source
amount or amounts comprising the prize pool, such as buy-ins, re-buys, or
add-ons;
(j) Prize structure on
payout;
(k) Methodology for
determining winner or winners; and
(l) The current status of the tournament,
contest, or pool, such as if the event is in-progress, complete, interrupted,
cancelled.
(6) The
licensee shall be responsible for the rake. At no time shall the calculation
resulting from a rake or rake adjustment be negative.
(7) For a contest, tournament, or pool that
utilizes shared liquidity available to patrons in Kentucky and other
jurisdictions, the rake rate shall be the same for all jurisdictions
participating.
Section 7. Acceptance of Wagers.
(1) A
licensee shall comply with GLI-33 Standards in accepting wagers.
(2) A licensee shall not set lines or odds or
offer wagering propositions designed for the purposes of ensuring that a patron
will win a sports wager or a series of sports wagers, unless the lines, odds,
or wagering propositions are offered in connection with a promotion or bonus
conducted in accordance with Section 9 of this administrative
regulation.
(3) A Licensee shall
not accept a sports wager on a sporting event unless a wagering proposition is
posted by electronic or manual means.
(4) Sports wagers may only be made by patrons
using forms of payment approved by the corporation including:
(a) Cash;
(b) Cash equivalents converted to
cash;
(c) Credit or debit
cards;
(d) Electronic funds
transfers (EFTs), including automated clearing house and other electronic
methods;
(e) Promotional or bonus
credit;
(f) Winning sports wagering
tickets or vouchers; and
(g) Funds
within a sports wagering account.
(5) The licensee shall debit the amount
wagered by a patron from the patron's sports wagering account. Wagers shall not
be accepted in an amount in excess of a sports wagering account
balance.
(6) A licensee shall not
accept a sports wager from a person on the sports wagering account of or for
any other person.
(7) The licensee
shall operate and communicate with the sports wagering system in a way that
does not provide or facilitate a wagering advantage based on access to
information and processing of mobile sports wagers by account holders relative
to patrons who wager at a licensed premises.
Section 8. Cancelled or Voided Wagers. Wagers shall not be cancelled or voided without prior approval of the corporation based on the best interests of sports wagering, unless the wagers are cancelled or voided by an authorized supervisory employee of the licensee, in accordance with GLI-33 standards and this section.
(1) A
licensee shall cancel or void a sports wager under the circumstances
established in paragraphs (a) through (i) of this subsection. The licensee need
not obtain prior authorization of the corporation to cancel or void the sports
wager under these circumstances:
(a) Any
sports wager in which after a patron has placed a sports wager, the sporting
event is cancelled, postponed, or rescheduled to a different date prior to
completion of the sporting event.
1. In the
case of a sports wager on a portion of a sporting event, that wager shall be
valid when the event is canceled, postponed, or rescheduled if the outcome of
the affected portion was determined prior to the cancelation, postponement, or
rescheduling; or
2. A licensee may
establish a timeframe in which an event may be rescheduled or postponed without
canceling the sports wager. This timeframe shall be tied to specific sporting
events, with the approval of the corporation, and documented in the internal
controls;
(b) A change
in the venue where a sporting event was scheduled to be held occurs after a
patron has placed a sports wager and the licensee cancels or voids the sports
wager prior to the commencement of the sporting event;
(c) Any sports wager in which an athlete
fails to participate in a sporting event and the outcome of the wager is solely
based upon that athlete's performance;
(d) Any sports wager received for an act, or
set of acts, to be performed during a sporting event in which the act does not
occur and the ability to wager on the non-occurrence of the event was not
offered;
(e) Any wager received on
if a team will qualify to participate in post-season competitions if the number
of teams allowed to participate in the post-season changes after a patron has
placed a wager;
(f) Changes to
rules are made by a sports governing body or equivalent regarding the format or
number of participants scheduled to participate in a defined phase of a
sporting event or that particular phase is not played at all;
(g) If the licensee has reasonable basis to
believe there was an obvious error in the placement or acceptance of the wager,
including:
1. The wager was placed with
incorrect odds;
2. Human error in
the placement of the wager; or
3.
Any other obvious error specifically included in the licensee's internal
controls.
(h) If a
patron requests a sports wager be cancelled or voided prior to the commencement
of the sporting event due to an error in communicating the type, amount, or
parameters of the sports wager; or
(i) If authorized or ordered by the
corporation pursuant to this section.
(2) A licensee may cancel or void a sports
wager for a material change in circumstances for a given sporting event or type
of wager, if:
(a) The licensee documents the
material change in its internal controls; and
(b) The licensee displays what constitutes a
material change to a patron at the time of placement of the sports
wager;
(3) For all
circumstances that are not established in subsection (1) of this section, a
licensee may request the corporation authorize the cancellation or voiding of
all sports wagers of a specific type, kind, or subject. A licensee shall submit
its request to cancel or void the sports wager in writing, and the request
shall contain:
(a) A description of the type,
kind, or subject of sports wager the licensee is requesting to cancel or
void;
(b) A description of any
facts relevant to the request; and
(c) An explanation why cancelling or voiding
the sports wager is in the best interests of the Commonwealth or ensures the
integrity of the sports wagering industry.
(4) The corporation shall issue a written
order granting or denying the request to cancel or void the sports wager. In
determining whether to grant or deny the request, the corporation shall
consider at least the following factors:
(a)
If the alleged facts implicate the integrity of the sporting event subject to
the wager or the sports wagering industry;
(b) If the alleged facts implicate possible
illegal activity relating to the sporting event or the sports wagering
industry;
(c) If allowing the wager
would be unfair to patrons; or
(d)
If allowing the wager is contrary to public policy.
(5) A sports wager subject to the request to
cancel or void shall not be redeemed, cancelled, or voided, until the
corporation or its designee issues an order granting the request to
cancel.
(6) If the corporation or
its designee grants the request to cancel or void, the licensee shall make
commercially and technologically reasonable efforts to notify patrons of the
cancellation or voiding of the sports wager.
(7) The corporation has discretion to order
all licensees to cancel or void all wagers on a specific sporting event or
wagers of a specific type or kind on a specific sporting event. In exercising
its discretion, the corporation shall apply the same factors established in
subsection (1) of this section.
(8)
A patron may request that the corporation or its designee review any sports
wager declared cancelled or voided by a licensee. If the corporation or its
designee concludes the canceling or voiding of the sports wager did not conform
with this administrative regulation, the corporation or its designee may order
the licensee to honor the sports wager.
(9) A sports wager shall not be declared
canceled or voided without the approval of an authorized supervisory employee
of the licensee pursuant to the licensee's internal controls, unless the
corporation or its designee has issued an order requiring the sports wager to
be canceled or voided.
(10) If a
sports wager is declared canceled or voided, the sports wager shall be refunded
to the patron and that amount shall be deducted from the adjusted gross
revenue.
Section 9. Promotional or Bonus Wagering. A licensee may conduct sports wagering promotions or bonuses. Promotions or bonuses shall be conducted in accordance with this section.
(1) Procedures for the
issuance, acceptance, and tracking of promotions or bonuses shall be included
in the licensee's internal controls.
(2) A licensee shall maintain a record of all
promotions or bonuses related to sports wagering to facilitate the
corporation's tracking of promotional or bonus activity, which shall address
the:
(a) Unique ID for each promotion or
bonus;
(b) Date and time the
promotion or bonus was or is scheduled to be available;
(c) Current balance for promotional or bonus
awards;
(d) Total amount of
promotional or bonus awards issued;
(e) Total amount of promotional or bonus
awards redeemed;
(f) Total amount
of promotional or bonus awards expired;
(g) Total amount of promotional or bonus
award adjustments;
(h) Current
status of the promotion or bonus (such as active, disabled, or decommissioned);
and
(i) Date and time the promotion
or bonus was or is scheduled to be decommissioned.
(3) All promotion or bonus rules shall be
full, accurate, concise, transparent, and shall not contain misleading
information. Promotion or bonus rules shall be readily accessible by the patron
and provide unambiguous notice of the:
(a)
Date and time the promotion or bonus is active and expires;
(b) Rules of play;
(c) Nature and value of prizes or
awards;
(d) Eligibility
restrictions or limitations;
(e)
Wagering and redemption requirements, which shall include a description of any
limitations;
(f) Patron
notification procedure if they have received an award;
(g) Order in which funds are used for
wagers;
(h) Eligible events or
wagers; and
(i) Cancellation
requirements.
(4)
Promotions or bonuses shall not be described as free or risk-free if those
promotions or bonuses require the patron to incur any loss or risk the patron's
own money to use or withdraw winnings from the free wager.
(5) A licensee shall provide a clear and
conspicuous method for a patron to cancel their participation in a promotion or
bonus that utilizes restricted wagering credits that cannot be cashed out until
a wagering requirement or other restriction associated with the credits is met.
(a) Upon request for cancellation, the
licensee shall inform the patron of the amount of unrestricted funds that will
be returned upon cancellation and the value of restricted wagering credits that
will be removed from the sports wagering account.
(b) If a patron elects to proceed with
cancellation, unrestricted funds remaining in a patron's sports wagering
account shall be returned according to the rules of a promotion or
bonus.
(6) Once a patron
has met the terms of a promotion or bonus, a licensee shall not limit winnings
earned while participating in the promotion or bonus.
STATUTORY AUTHORITY: KRS 230.260(16), 230.361, 230.808
Disclaimer: These regulations may not be the most recent version. Kentucky may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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