Party-Line Vote Kills KY Racetrack VLT Bill

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A party-line vote in the Republican-heavy Senate Appropriations and Revenue Committee June 22 killed legislation to authorize video lottery terminals at racetracks in Kentucky.

The vote was 10-5, with one abstention. Of the 12 Republicans on the committee, only Sen. Tom Buford of Nicholasville voted to move the bill to the Senate floor.

The five Democrats that voted wanted the bill heard by the full Senate. One of them, Sen. Tim Shaughnessy of Louisville, noted the full Senate is 42% Democratic compared with about 20% on the Appropriations and Revenue Committee. The committees, he said, are supposed to be proportionate.

“History is on the side of this issue,” said Shaughnessy, who noted the legislation passed the Democratic House on a 52-45 vote June 19. “This is eventually going to happen. It may be stopped today, but the issue is when it happens.”

The racetrack VLT bill was sponsored by Democratic House Speaker Greg Stumbo and placed on the call for the special session by Democratic Gov. Steve Beshear. Stumbo was on hand when the Senate committee voted, and afterward said the bill didn’t get a full hearing—a vote on the Senate floor.

Stumbo said he believes a constitutional amendment isn’t necessary for racetrack VLTs, and said the measure could resurface during a conference committee if the House and Senate fail to agree on a budget plan during the special session, which began June 15. To that end, he said: “You never know what can happen until the General Assembly adjourns.”

The House budget proposal includes a plan to build new schools with revenue from VLTs. The Senate is expected to reject it in light of the committee vote.

Keeneland president Nick Nicholson, who made a presentation before the Senate committee, said after the vote he’s “disappointed” in the committee vote and the fact the bill didn’t make it to the Senate floor. Still, Nicholson said the issue won’t go away.

“We really want to thank the speaker and governor for their courage and realizing the importance of our industry,” said Nicholson, who serves as the horse industry’s spokesman. “We’re not going to go away. This is not the last you’ve heard on this issue.”

“I’m depressed,” said Joe Costa, president of The Red Mile harness track in Lexington. “The governor showed great leadership, the speaker showed great leadership, and 52 members of the House voted for (the legislation). We would have loved the opportunity for a full Senate vote, because we believe the votes were there on the floor.

“It’s a tragedy this didn’t get the full opportunity for a floor vote.”

Ellis Park president Ron Geary, who has said his track will close next year without gaming, wouldn't predict the outcome.

“Let’s see what happens,” Geary said. “Let’s see what shakes out. The Thoroughbred horse industry is in undisputed crisis (in Kentucky).”

Turfway Park president, Bob Elliston, who earlier in the day said his track would close at the end of 2010 without alternative gaming, said Beshear and Stumbo showed leadership in helping the horse industry. He, too, wanted what he called a “fair hearing” on the Senate floor.

Republican Sen. Charlie Borders, who chairs the Appropriations and Revenue Committee, said the issue received a fair hearing during the more than two-hour committee meeting. He noted the Senate unanimously supported a plan from Republican Senate President David Williams to funnel about $60 million a year to purses.

Williams’ plan would tax lottery tickets and pari-mutuel wagers made out of state, which is effectively a hike in the takeout that could hurt Kentucky tracks. He also had proposed taxing charitable gaming and loaning racetracks money from a health insurance fund.

The plan, which the racing industry believes is problematic, sailed through the Senate. Williams proposed it just hours after the governor put his racetrack gaming plan on the call for the special session.

The Senate committee hearing wasn’t without its moments. David Edmunds, who spoke on behalf of the Family Foundation, quoted historical material in which lotteries were likened to “blood-sucking vampires.” Shaughnessy asked Edmunds if he made the comments for effect, or actually believed it.

“It’s a qualified yes,” Edmunds said.

Shaughnessy said the characterization was “inflammatory at best,” then noted Edmunds said he supports the plan for a 10% tax on lottery tickets to fund purses.

Ron Morris, representing the Charitable Gaming Association, said licenses are decreasing, and so is revenue for charities. He said “recreational (gaming) dollars would be severely depleted if VLTs were used at tracks.”

Shaughnessy asked Morris about Williams’ earlier plan to implement a 10% on charitable gaming.

“I heard about that,” Morris said. “Without a doubt it would have had a negative impact, but if we could have made some offsets, it might not have been devastating.”

Democratic Sen. David Boswell, who has pushed for casino gambling in his Owensboro district, said the horse industry in Kentucky is in trouble, and the debate should be held on the floor of the Senate. Democratic Sen. Denise Harper Angel agreed.

With the exception of Buford, the Republicans showed no interest in a floor debate. Sen. Ernie Harris, who has horse farms and training centers in his district just northeast of Louisville, said if the issue is about purses, VLTs aren’t necessary.

“The Senate bill passed unanimously,” Harris said. “It’s not perfect, but it’s a very good start. I fear the proliferation of slots.”

Sen. Alice Forgy Kerr of Lexington said VLTs would prey on individuals, so she opted not to send the legislation to the full Senate. “We have proposals on the table that can benefit the horse industry without doing damage to our most vulnerable citizens.”

Democratic Rep. Susan Westrom, who voted in favor of racetrack VLTs in the House, questioned whether the bill even had a chance in the Senate committee.

“This meeting met my expectations of political pressure and judgments about what’s good for Kentucky, and the idea that this legislative body needs to tell people what to do with their recreational dollars,” Westrom said after the Senate committee meeting.

The following senators voted against the bill: Charlie Borders, Bob Leeper (an Independent), Ernie Harris, Dan Kelly, Alice Forgy Kerr, Vernie McGaha, Brandon Smith, Bob Stivers, Gary Tapp, and Elizabeth Tori.

The following senators voted for the measure: David Boswell, Tom Buford, Denise Harper Angel, Joey Pendleton, and Tim Shaughnessy.

Democrat R.J. Palmer abstained.