Casino Bill Clears Committee--But Racetracks Left Out

by Tom LaMarra and Esther Marr
A Kentucky House committee approved legislation March 15 to authorize a constitutional amendment on casino gambling, but the substitute measure--believed to have little or no chance of passage in the full House--makes no mention of racetracks or dedicated revenue for state programs, the lynchpins of legislation proposed by the Kentucky Equine Education Project.

Action by the House Licensing and Occupations Committee seemingly puts the horse industry in an awkward position. KEEP spent more than a million dollars on a statewide advertising campaign to "let the people decide"--but KEEP wanted the ballot question to specify racetracks and mandate how the state would spend its percentage of adjusted gross revenue from casinos.

The constitutional amendment passed by the committee simply states: "The General Assembly may by general or special law authorize the operation of casino gaming at designated venues, provided that at no time the number of casinos exceeds nine." The KEEP legislation called for casinos at the state's eight licensed racetracks; a compromise with Democratic Sen. David Boswell added several non-track locations to the ballot question.

Lawmakers wouldn't assess the bill's chances in the full House. Industry sources who earlier said politics, not the lack of a compromise, had stymied the KEEP bill indicated the substitute bill probably would go nowhere. Sixty votes are needed in the House, and the General Assembly session is over in a few weeks.

The substitute measure, moved to last on the March 15 agenda, was introduced and immediately went to a vote. At least one lawmaker was caught off guard. Republican Rep. Stan Lee, who ultimately voted against the measure, said he wanted more time to discuss the substitute bill before any action was taken.

"I have serious concerns for this issue and the horse industry," Lee said. "I fear the horse industry could be like the dog that catches the car. This may tear it down."

Lee then began to comment on how slot machines and other forms of gaming haven't helped pari-mutuel handle but was cut off by Democratic Rep. Denver Butler, the committee chairman. "This has nothing to do with the horse industry," Butler said. "Where (gaming) will be would be up to the General Assembly to decide."

When asked after the meeting if racetracks no longer are part of the equation, Butler said the General Assembly would address casino locations in enabling legislation should a majority of Kentucky voters approve the ballot question. "This is real simple and easy to understand," he said of the substitute language.

Should such a ballot question pass, the enabling legislation itself could prove problematic as special interests lobby for a share of the gaming pie. Also, the revenue splits could be subject to change by the legislature; such a scenario has unfolded in West Virginia, where racetracks have video lottery terminals.

"It's just a number limiting locations," Democratic Rep. Susan Westrom, one of the sponsors of the KEEP legislation, said after the committee meeting. Westrom voted in favor of the substitute measure. "The good thing about it is that, when placed on the ballot, it's a much more understandable bill."

No KEEP officials attended the committee hearing, nor did the KEEP bill's lead sponsor, Democratic Rep. Joe Barrows. After the meeting, KEEP executive director Jim Navolio said the organization hopes to have input in any legislation.

"We have been consistent in the position that we first made public in September," Navolio said. "That has continued to be our position for a long time. We also know the legislative process has got a long way to go. We certainly hope the good points from our proposal will be included in any bill that (is voted upon on the House floor). We have offered an idea and a proposal. Our ideas and proposals are still valid, and we hope to have the opportunity to get them included in a piece of legislation. I've got to be positive.

"We don't know what the next step will be. That's up to leadership and the rules committee on whether they assign it to another committee or call for a floor vote. We don't know yet that answer."

Said Kentucky Thoroughbred Association executive director David Switzer, who was at the state capitol March 15: "There possibly could be no racetracks (under the enabling legislation), but I doubt that. I have confidence in our legislature--but you never know."

Results of polls authorized by KEEP indicated a majority of those surveyed approved of casinos at racetracks, especially if the revenue were dedicated. Some lawmakers, however, objected to having dedicated revenue part of the ballot question.

Rev. Nancy Jo Kemper, executive director of the Kentucky Council of Churches, said the public deserves more "clarity and specificiality" when it comes to language for constitutional amendments. She also said: "We don't do government by referendum in Kentucky."