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Legislature talks gambling




FRANKFORT

Gov. Steve Beshear called this week for lawmakers to approve a proposal to allow Kentucky’s horse tracks to expand gambling with casino-style games.

Trying to muster support in a divided Legislature, Beshear said the state’s signature industry is facing fierce competition from other horse racing states and that lawmakers need to act quickly so that Kentucky doesn’t surrender it’s title of Horse Capital of the World.

“If we don’t act now, our racetracks face declining status and even the certainty of closure,” he said.

Lawmakers convened in a special session Monday, hours after Attorney General Jack Conway concluded they have the authority to allow casino-style gambling at horse tracks without amending the Kentucky Constitution.

The issue has been contentious for years in the General Assembly. Conway weighed in at the request of former House Speaker Jody Richards and concluded that a constitutional amendment isn’t necessary if the state Legislature passes a law putting the Kentucky Lottery Corp. in charge of the proposed video gambling terminals.

“My staff and I simply followed the law and allowed it to lead us to the proper legal conclusion on this issue,” Conway said.

State leaders have debated for years whether Kentucky, a state with a long tradition of betting on horse races, can offer casino-style gambling at the tracks. Opponents argue that the state constitution specifically forbids casino-style gambling. Proponents contend a previous constitutional amendment to allow a state lottery opened the door.

Beshear, who favors expanding gambling in the state, said Conway’s opinion was clear and well-reasoned.

Twelve other horse racing states — including Kentucky neighbors West Virginia and Indiana — allow bettors to wager on video gambling machines, slot machines or other casino-style games at the track, according to the American Gaming Association’s 2009 State of the States report.

Beshear told lawmakers that his proposal is designed to help the state’s horse tracks compete.

“And by carefully spelling out how those gaming proceeds are distributed, my plan also — without raising taxes on our families — helps ensure an additional steady source of revenue to support the core functions of our state government long after stimulus dollars disappear,” he said.

House Speaker Greg Stumbo said he believes lawmakers are more receptive to the gambling proposal this year because they realize how badly Kentucky’s horse industry needs additional money to compete. The proposal would also generate nearly $300 million a year in tax revenues for state government.

Stumbo, however, said lawmakers were also considering what could be a massive new school construction proposal. Lawmakers were still working on the plan, Stumbo said, but it could be tied to the gambling legislation or included in the budget plan.

“I don’t call them sweeteners,” Stumbo said. “If there’s going to be additional revenue that would be generated I think it would be appropriate that the General Assembly, having the constitutional power to spend money, would place into the document its will as to how that money be spent.”

Depending on the number of schools that would be funded, the proposal could range from $100 million to $1 billion, Stumbo said.

House Minority Floor Leader Jeff Hoover, a Jamestown Republican, said he did not want legislative leaders to add measures to the proposed gambling legislation.

“Let’s vote on the bill that’s there,” Hoover said. “The governor said it’s time for an up or down vote. Let’s have that up or down vote. Let’s don’t try to sweeten the pot.”

Beshear released a proposal last week calling for Kentucky’s horse tracks to buy 10-year licenses to operate video lottery terminals. Those licenses would generate $360 million. Revenue from the slots would be divvied among purses and breeders’ incentives, state government and the tracks, with the track keeping the bulk of the money.

But gambling opponents, motivated largely by moral and religious objections, claim gambling’s negatives won’t infuse enough cash to sustain the horse industry but could wreak havoc on the pocketbooks of Kentucky residents.

“Slot machines can separate a man from his money much more efficiently than horses,” said David Edmunds, a policy analyst for the conservative Kentucky Family Foundation. “You don’t have to put shoes or saddles on a slot machine. You don’t have to put a jockey on a slot machine.”

Edmunds said Beshear’s proposal carries with it “the ABCs of gambling: addiction, bankruptcy and crime.” And he contends that the proposal, if approved, could carry social costs that far exceed financial benefits.

Beshear’s primary reason for calling lawmakers back to Frankfort was to deal with a projected $1 billion budget shortfall. He tacked gambling and some other proposals on the agenda. One would provide an economic development tax incentive package aimed at landing a NASCAR Sprint Cup race at Kentucky Speedway, attracting a Breeder’s Cup championship event, and luring more film producers to the state.

The governor also wants lawmakers to consider legislation that could lead to the creation of a toll authority to pay for new Ohio River bridges between Kentucky and Indiana at Louisville.

The governor amended the legislative agenda to include language that would allow the creation of financial authorities for other construction projects.

The amended agenda also would allow for the gambling legislation to be altered if necessary to get it through the House and Senate.


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