After completing almost three years in his state Senate, Chandler was elected lieutenant governor in 1931, as fellow Democrat Ruby Laffoon (male) (1869–1941) became governor. The two clashed over the establishment of a state [[sales tax]], which Chandler opposed and which narrowly passed the legislature. Laffoon's allies then stripped the lieutenant governor of many of his legal powers. When Laffoon was out of state, Chandler as acting governor called a special session of the legislature and obtained implementation of a law to require [[primary]] elections in Kentucky, rather than permitting the party leadership to tap its candidate of choice. At the time Kentucky governors could not serve consecutive terms, and Chandler faced Laffoon's choice of Thomas Stockdale Rhea in the primary. After defeating Rhea,<ref>[https://www.ourcampaigns.com/RaceDetail.html?RaceID=492054 KY Governor - D Runoff Race - Sep 07, 1935]. ''Our Campaigns''. Retrieved July 31, 2021.</ref> Chandler swamped the [[Republican Party|Republican]] King Swope (1893–1961) of Lexington,<ref>[https://www.ourcampaigns.com/RaceDetail.html?RaceID=492054 KY Governor - D Runoff Race - Sep 07, 1935]. ''Our Campaigns''. Retrieved July 31, 2021.</ref> a former [[U.S. Representative]] for the state's since-disbanded 8th congressional district. Governor Chandler in his first term oversaw the repeal of the sales tax, along with passage of new excise taxes and a state income tax. Chandler also obtained passage of a reorganization of state government and strengthened the education and transportation systems.<ref name=nyt>{{cite web|url=https://www.nytimes.com/1991/06/16/obituaries/ab-happy-chandler-92-dies-led-baseball-during-integration.html|title=A.B. (Happy) Chandler, 92, Dies; Led Baseball During Integration|author=Robert M. Thomas, Jr.|publisher=''[[The New York Times]]''|date=June 16, 1991|accessdate=July 31, 2021; under pay wall; archived version available [https://archive.is/teCOU here]}}</ref>
In 1938, Chandler, still in office as governor, opposed the re-nomination of U.S. Senator [[Alben Barkley]], a [[New Deal]]er and favorite of President [[Franklin D. Roosevelt]], who came into the commonwealth to campaign for Barkley. Chandler lost a close the primary race to Barkley. <ref>[https://www.ourcampaigns.com/RaceDetail.html?RaceID=491885 KY US Senate - D Primary Race - Aug 06, 1938]. ''Our Campaigns''. Retrieved July 31, 2021.</ref> The following year, Kentucky's other Democratic senator, Marvel Mills Logan (1874–1939) of Elizabethtown, died in office, and Chandler resigned as governor so that his successor, Keen Johnson (1896–1970), could appoint him to the vacant Senate seat.<ref>[https://bioguideretro.congress.gov/Home/MemberDetails?memIndex=C000290 Biographical Directory of the U.S. Congress - Retro Member details], accessed July 31, 2021.</ref>
In 1945, Chandler left the Senate to succeed Kenesaw Mountain Landis (1866–1944), a [[Segregation|segregationist]], as commissioner of baseball. In this capacity, Chandler approved the contract of [[Jackie Robinson]] with the former [[Brooklyn Dodgers]] and hence [[Segregation|desegregated]] baseball. The baseball owners had all opposed admitting Robinson into the league, but Chandler overruled them. Chandler established the first pension fund for MLB players financed by [[radio]] rights on the [[World Series]]. The baseball owners, influenced by Dodgers manager Leo Ernest Dorocher (1905–1991), whom Chandler derided for alleged times to [[gambling]], did not renew his contract in 1951.<ref>Chandler, Happy | Baseball Hall of Fame, accessed July 31, 2021.</ref><ref name=utube/>