This week is one of the biggest weeks of the year on the Kentucky sports betting calendar as the NCAA basketball tournaments take center stage.
All week long, there will be discussions about the Kentucky Wildcats and their path to the Final Four and there will be chatter about the Louisville Cardinals’ return to the Big Dance for the first time since 2019. But beyond that there will be conversations about which five seed is the most vulnerable and what lower seeds are the most likely Cinderella candidates.
This year also marks the second NCAA Tournament where Kentuckians will be able to wager on legally through the eight sports betting apps licensed across the state. The tournament is one of the biggest events for U.S. sportsbooks as the American Gaming Association forecasts Americans will wager $3.1 billion on the tournament through operators approved in 38 states and the District of Columbia.
BetKentucky wanted to know how much of that estimated handle will be placed in the Bluegrass State. To come up with our estimate, we took the AGA’s forecast and devised a basic market share based on data from the states, like Kentucky, that make handle and operator revenue totals public. From there, we adjusted the totals based on assumptions of college basketball interest related to other sports in each state.
Kentuckians Expected To Wager $95 Million On NCAA Tournaments
Kentucky is not the biggest sports betting state, but few rival its passion for college basketball. With the Wildcats among the top-seeded teams and the Louisville Cardinals making their long-awaited return to the Big Dance, fans of both schools will be eager to bet on their teams in hopes either or possibly both can make deep runs in this year’s tourney. Both schools also have their women’s teams in the tournament, and those games should attract plenty of interest as well.
Because of that interest – as well as the first- and second-round games taking place in Lexington later this week – BetKentucky estimates the state’s sportsbooks will take $95 million in wagers over the next three weeks.
Kentucky is a mid-sized state in the U.S. sports betting market, roughly making up 1.7% of the betting traffic. Based on the AGA’s forecast, that would put Kentucky’s handle at around $53 million. However, given the state’s status as a college basketball hotbed, we feel it’s likely there will be far more interest in betting on the tournament than in other states.
Potential Tax Proceeds From Kentucky March Madness Betting
In addition to forecasting the handle, BetKentucky took the next step to determine how much tax revenue the state could expect from wagering on March Madness.
To do this, we came up with two scenarios. The first looks at what the state would receive if the sportsbooks’ hold rate was 5%. This would happen if either Kentucky or Louisville (or both) did better than expected in the tournament and a high percentage of betting favorites won throughout the three-week event.
The second is a 12% hold. This would cover a scenario where neither Kentucky nor Louisville make a deep run in the tournament and an unexpected longshot ends up winning it all.
Kentucky is one of the few states that has a bifurcated sports betting tax structure. Retail sportsbooks at the state’s racetracks and historical horse racing gaming halls have their revenue taxed at 9.75%. Online operators are taxed at 14.25%. For this forecast, we estimated 97% of the wagering would take place through mobile apps.
Based on all that, BetKentucky expects the state to receive between $670,000 and $1.66 million in tax proceeds from March Madness wagering.
Both Kentucky and Louisville are considered longshots to win the title this year. BetMGM Kentucky sportsbook offers the Wildcats at +5000, while Fanatics lists the Cardinals at +10000.
