KY Commission Endorses Governor's VLT Plan

The legislation would also help fund the racing commission.

Citing threats to the state's racing and breeding industries from other states in which alternative gaming boosts purses and breeding programs, the Kentucky Horse Racing Commission June 9 unanimously endorsed a plan for video lottery terminals at racetracks that was unveiled earlier in the day by Gov. Steve Beshear.

Among other provisions, Beshear's legislation also awards $4 million per year to support the KHRC, which is under-funded. It also states that 0.50% of racetrack revenue must be used for backstretch improvements.

An overview of Beshear’s VLT proposal can be viewed at the governor’s Web site.

In voicing support for alternative gaming at racetracks, KHRC member John Ward said he believes opposition to VLTs at tracks could be due to the fact most of the publicity surrounding the concept has focused on how it would benefit the tracks. Ward, a trainer who won the Kentucky Derby (gr. I) with Monarchos, said he believes the real benefits from VLT revenue will be to the state’s breeding industry and related jobs.

“I think the general public and some of our legislators don’t understand this is about the breeding business in Kentucky,” Ward said. “Without this, our Kentucky breeding industry is getting ready to be at the bottom of the list.”

Because of the success of the Bluegrass breeding industry, other states that have breeding programs have targeted Kentucky and have succeeded in taking away farms, broodmares, and stallions, Ward said. In addition to having lucrative racing and breed incentive programs subsidized by VLT revenue, those other states are limiting the number of Kentucky-bred horses that can race at their venues, he noted.

“This is a way to save and bring the Kentucky breeding program back to where it used to be,” said Ward, who cited the parallel between how other states successfully lured automobile manufacturers out of Michigan with incentive programs, and the subsequent devastating effects.

KHRC member Betsy Lavin, whose family operates Longfield Farm near Goshen, said she has first-hand experience with the effectiveness of competition from other states, noting how some of her clients have taken mares to other locations to take advantage of breeding program incentives.

Other commissioners, who in recent months have witnessed drastic cuts in racing days at many of the state’s tracks due to an insufficient number of horses, agreed with Ward, with some citing the elements of the proposal that have financial benefits to other Kentuckians.

Included in Beshear’s plan is an exemption from individual income taxes for all active duty military personnel, and an individual income tax credit equal to 50% of the state property tax on registered motor vehicles. It also includes tax relief for various purchases related to breeding, raising, training, or transporting of horses, including machinery, feed, farm chemicals, and on-farm equine facilities.

Those equine-related tax provisions are valued at about $29 million a year, according to Beshear's VLT plan.

“This is a lot bigger than racetracks…I think this is going to help all Kentuckians,” said Dr. Foster Northrop, an equine veterinarian who serves on the commission. Northrop previously had told the commission how he has witnessed an exodus of trainers from Kentucky due to the disparity in purses when compared with states with VLTs.

Beshear’s bill needs to be recognized as a “broad, broad proposal,” commissioner Ned Bonnie said.

Commissioner Alan Leavitt, whose family operates the Walnut Hall Standardbred farm, said that breed has also been negatively impacted by competition from other states, and that he is finding it increasingly difficult to remain in the Kentucky breeding market when there are more lucrative locations elsewhere.

Representatives of the state’s racetracks and horsemen’s groups also voiced support for the VLT legislation.

In other action, the KHRC adopted a recommendation from its Safety and Welfare Committee to establish minimum requirements for safety vests worn at racetracks and any other facilities under the commission’s jurisdiction.

The rule requires safety vests to meet specified minimum standards, and permits jockeys and exercise riders to use vests that exceed the standards. The commission also agreed with the committee to require that a safety vest be worn by any person mounted on a horse or stable pony, all assistant starters, and any person handling a horse in a starting gate. 

The rule, which will undergo a five- to six-month vetting period before it takes effect, was supported by the Jockeys’ Guild.

In his report to the commission, chief state veterinarian Dr. Bryce Peckham reported there were five catastrophic (fatal) injuries among the 1,904 starters during the first 25 days of the Churchill Downs spring meet.