Nicholson Addresses Expanded Gaming in Kentucky

Proponents of expanded gaming in Kentucky should focus more on how it would generate revenue for the good of the Commonwealth, rather than how it would impact horse racing, Keeneland president Nick Nicholson said Tuesday at a public policy forum in Versailles, Ky.

"The whole issue should be not how this is going to affect the horse business, and I think too often we've allowed it to become that," Nicholson told an audience of about 100 lawmakers, lobbyists, and corporate and organization executives on both sides of the expanded gaming debate in the Bluegrass state.

"If I were a member of the legislature, the affect of Kentucky's horse industry on the expanded gaming issue would not be enough for me to vote 'yes,'" Nicholson said. "It's got to make sense from a broader standpoint. The issue to me, which I think it is to most people, is more about how our children are educated, or about seniors, and the basic services provided by the government and the problems of funding and the infrastructure of government at the local level. It's about all these things that add up to what kind of Commonwealth we have and how we're going to pay for it."

Nicholson's remarks came in a keynote address at the one-day meeting, "Gaming, Gambling and Government: Legislative issues for the 2006 Kentucky General Assembly," sponsored by The Kentucky Gazette and Quadrant 2 consulting firm.

Nicholson said the question is whether the state has enough revenue to adequately provide its basic services. If the answer is no, then other revenue sources -- even raising taxes--should be explored before expanded gaming is brought to the table.

With that said, Nicholson said he doesn't know of any other non-tax raising sources of revenue that would generate the amount of money -- a projected $400 million -- that expanded gaming would bring to the state.

"From an economic standpoint, you have to look at expanded gaming, but this has nothing to do with horses," Nicholson further said.

He said, however, it would be a "nightmare" for the horse industry if the state decided to legalize expanded gambling without including Kentucky's signature industry.

Nicholson aligned his views with the recent position unveiled by the Kentucky Equine Education Project that supports a voter referendum to amend the state constitution to allow for full casino gaming for those holding licenses to operate racetracks in Kentucky.

KEEP also supports earmarking significant and quantified gaming tax revenues for education, healthcare, local development funding, and preserving the environment.

Nicholson said an advantage to granting licenses to racetracks only would prevent the geographical expansion of gaming to other areas of the state.

In an earlier address, Sen. David Boswell said an expanded gaming bill he has introduced to the state Senate three times with no avail, would allow for nine gaming licenses in the state, five reserved for racetracks and four for additional locations.

Nicholson said both KEEP's position and Boswell's bill should be starting points as they move forward with the expanded gaming issue.

"It's of Boswell's opinion that there is a need for other places in the state to have licenses, and I think we should be respectful of that," Nicholson said. "And I agree with his words that this is on the table and this is a starting point, or a suggestion, and we ask that it be done in the context of broader things...a Constitutional amendment should deal with the proliferation issue."

Nicholson said the "beauty" of a Constitutional amendment is that the people of Kentucky get to vote and dismissed a local option as "fool's gold."

"There are too many people in this state that are good people who have problems with this -- too many people who are unsure of this," he said. "They should have their chance to vote. It will never be fully accepted if you don't allow people to vote."

When asked by an audience member if Keeneland would build a casino on its property in Lexington if an expanded gaming bill was realized in the state, Nicholson said, "the plan is not to rule out building a casino at Keeneland." He said the grandstand area would not allow room for a casino, however there were three or four other sites on the property that would be suitable.

"As far as Keeneland goes, if this happens, if this passes and if we are charged with the responsibility of building one of these -- which, by the way, would be the largest single capital investment in the history of Keeneland -- then I think our feet should be held to the fire of how we're going to build, manage, operate and market it. We have to recognize a substantial group of people in every community we're in, won't want us to be there."