Casinos at five racetracks in Kentucky would generate about $86 million a year for the horse industry, a sponsor of expanded gambling legislation told the House Licensing and Occupations Committee Jan. 15.
The bill had its first hearing in the committee during an informational session. No vote was taken to move the measure forward.
Democratic Rep. Larry Clark, who co-sponsored the legislation with Republican Rep. David Osborne, said the revenue estimate is based on a projected $574 million in adjusted gross revenue at five racetrack casinos. The enabling legislation—a companion bill authorizes a simple constitutional amendment—also calls for three non-track casinos in strategic border locations.
"I hope we are ready this time to take action (on expanded gambling)," Clark said. "I think we're in a good position this year to make progress. I do think there is interest in trying to make it happen this year."
Expanded gambling has the support of Democratic Gov. Steve Beshear.
Though the Senate has suggested a gambling bill should start in the House of Representatives, legislation has been introduced in that chamber as well by Republican Sen. Dan Seum. The measure is ballot language authorizing up to seven casinos and creation of an Equine Excellence Fund that would get 10% of gaming revenue each year.
Seum's bill has been sent to committee but has not had a hearing.
Clark's bill simply asks voters if they approve changing the state constitution to allow the General Assembly to authorize casino gambling. He said the enabling legislation would automatically take effect after certification of the vote should the measure pass.
"We need to make it clear to voters and the industry," Clark said. "I think we all concur we need to have a clean amendment."
Clark said five tracks—Churchill Downs, Ellis Park, Keeneland, Kentucky Downs, and Turfway Park—would be permitted to apply for gaming licenses. He said there is broad speculation Keeneland would partner with The Red Mile, a harness track, since both are located in Lexington.
The casinos wouldn't need to be located at the racetracks. For instance, Churchill would have the option of building one in downtown Louisville.
No revenue from non-track casinos would go to the horse industry. The racetrack casinos would pay 14.5% of adjusted gross revenue to fund purses and breeding programs; that same percentage at non-track casinos would go to the state.
The bill states that 60% of money generated for purses would stay at each track, with 40% sent to an industry fund that would be shared with other tracks. Clark said that's necessary at a track like Kentucky Downs, which races five or six programs a year but most likely would be the top gaming revenue producer because of its location on the Tennessee border.
Clark noted Thoroughbred tracks would have preference over Standardbred tracks. He said the latter is important to Kentucky, but "the Thoroughbred industry is the real driver of the equine industry (in the state)."
Osborne, who is a Thoroughbred owner/breeder, and Clark said an objective of the bill is to gradually increase live racing dates, which have dropped from 269 in 2000 to 189 in 2013. Osborne said 65 of about 80 days have been trimmed from Turfway Park, and the rest from Ellis Park.
"These are the two most important tracks to the year-round circuit," Osborne said.
The bill also sets aside revenue for backstretch improvements and the Kentucky Breeders' Incentive Fund, which could grow from its current $10 million a year to $24 million, according to estimates.
Both lawmakers said horse industry stakeholders are meeting regularly to develop a consensus. Collectively the industry has been silent on the bills introduced in the General Assembly.
"There has been a lot of compromise already," Osborne said.
The House Licensing and Occupations Committee will take comments Jan. 22 from those opposed to the casino measure, said Democratic Rep. Dennis Keene, who chairs the committee.
Keene, whose district is located near Turfway in Northern Kentucky, endorsed a vote on casino gambling. He said he gets questions from constituents about why they can't vote on expanded gambling.
"It's frustrating to answer that question," Keene said. "It's a travesty that we don't give voters in Kentucky credit for being smart enough to vote on an issue like this."