Disagreement within the horse racing industry has made it questionable whether the Legislature can pass a constitutional amendment on casinos this year, Gov. Steve Beshear said Tuesday.
Beshear told reporters that Kentucky’s horse racing industry is divided on how to proceed, which has weakened the chances of passing an amendment.
Despite a long history of wagering on horses, Kentucky has a constitutional ban on casino-style gambling. Beshear has pushed for a constitutional amendment since he took office in 2007, but many lawmakers have been reluctant to support the move, knowing they may face disapproving constituents in future elections.
Beshear insists that Kentucky is losing hundreds of millions of dollars a year to neighboring states that already have casinos. He said Kentucky needs to legalize casinos so that money can be kept in the state to generate cash for Kentucky’s signature horse industry and to bolster government revenue.
“I think it’s also become clear from our prior experience that the language that has the best chance of success in the General Assembly is what we would call a clean amendment, one that authorizes expanded gaming, perhaps limits it to a certain number of locations, but does not guarantee racetracks a monopoly on casinos,” Beshear said Tuesday. “I am finding that that type of language in an amendment has more support than the prior efforts we’ve made. And I’m encouraged by that. However, several of the racetracks outside of Louisville are opposing such an amendment on the grounds that it doesn’t give them a guarantee of a casino or mileage protection from any kind of competition.”
Beshear had been hopeful that the retirement of former Senate President David Williams, a Republican who had been seen as the main roadblock to legalizing casinos, would improve the chances of amending the state constitution to legalize gambling. After losing a bid to unseat Beshear, Williams resigned late last year when the Democratic governor appointed him as a circuit judge in southern Kentucky.
His departure, however, doesn’t appear to have significantly improved the odds of passing a gambling amendment in the Bible Belt state even though proponents have said Kentucky could collect more than $250 million in one-time license fees by allowing casinos to open. Taxing casinos after they open, proponents contend, could generate more than $350 million a year for government programs and services.
The process for changing the constitution to allow casino gambling starts with lawmakers who have to approve a proposed amendment. That amendment would be placed on the ballot for voters to ratify or reject.
The sales pitch in the past has been that Kentucky’s thoroughbred industry needs casino revenue to compete with other states that are supplementing their horse racing purses with other types of gambling revenue. Despite the importance of the thoroughbred industry, that pitch hasn’t worked.
Beshear said three horse tracks — Keeneland, The Red Mile and Kentucky Downs — are leading the opposition to his latest proposal.
“We have even been toying with some language that would go in a constitutional amendment and guarantee a certain percentage of the revenues from casinos go into what we would call an Equine Excellence Fund created by the Legislature that would go toward purses, breeders incentives and all of those types of equine programs that would have received funds in prior amendments,” Beshear said.
Beshear said “virtually every breeder and owner” would support such a proposal.
“But at this point, those same race tracks are still opposed to an amendment, even with that type of language of in it,” Beshear said. “I feel that if those tracks were on board we would have the votes in the Senate now to pass that type of amendment. So we’re still in conversation with senators and we’re still in conversation with the racetracks, but I can’t predict at the moment whether any bill will be filed or what action may happen during this session.”
The Family Foundation policy analyst Martin Cothran, a casino opponent, said he suspects the governor will call a special legislative session later in the year to try to pass a gambling amendment. Cothran said he expects Beshear to make revenue from gambling a part of a proposed fix for the state’s financially troubled pension system for government retirees.
“If the governor is this bad at hiding his intentions, then he’s going to end up in the same spot he ended up in last session: having expended a lot of effort and not get anything for it,” Cothran said.
Senate Floor Leader Damon Thayer, R-Georgetown, said that for a gambling amendment to pass it needs “some level of agreement from the horse industry” and a governor “to push it as a priority.”
“Absent that, I’d say its chances are low,” Thayer said.