The Department of Revenue administers the fantasy contest tax. The new statutory language is provided in KRS 138.505 and KRS 138.507.
Effective January 1, 2027
House Bill 757, passed during the 2026 Kentucky legislative session which imposes an excise tax on fantasy contest service providers. Beginning on
January 1, 2027, the Commonwealth imposes a tax rate of
12% of the fantasy contest service provider’s adjusted gross fantasy contest receipts. The accrual method of accounting shall be used for purposes of calculating the amount of tax owed by the fantasy contest service provider.
“Fantasy contest service provider” is a person or entity that offers fantasy contests to the general public and does not include an internet service provider or a provider of mobile data services merely as a result of that provider’s transporting of general traffic that may include a fantasy contest.
“Adjusted gross fantasy contest receipts” means the total sum of entry fees collected by a fantasy contest service provider from all fantasy contest participants entering a fantasy contest, less winnings paid to fantasy contest participants in the contest.
The fantasy contest service provider’s tax returns and payments are due on or before the 20th of the month following the month in which contests occurred. The first reporting period, January 2027 will be due on or before February 22nd , 2027.