Legislators: Industry Greed Killed Kentucky Bill

Kentucky legislators have left open the possibility expanded gambling could be revisited in the future, but they claim greed and resistance by the horse racing and breeding industry put a casino bill on the shelf for the 2004 session. Industry officials disagree with that perspective.

The House Licensing and Occupations Committee was scheduled to vote March 10 on legislation sponsored by Rep. Larry Clark, a Louisville Democrat. But talks between Clark and the horse industry fell apart March 8, and no progress was made in the interim.

"It appears it will not be moved forward at this session," Clark said during the committee hearing. "I think the bill is a solid foundation to build upon. It provided a good framework. The plan set forth would have significantly enhanced the racing and breeding industry...We hope to be able to get it done in future sessions."

Rep. Denver Butler, also a Democrat, said the bill as introduced was workable, and given the economic climate and the fact hundreds of millions of dollars from Kentuckians are spent at riverboat casinos in neighboring states, the issue probably would come up again at some point.

The committee chaired by Butler passed a racetrack gaming bill in 2003, but it never went any further in the legislature.

"The plan was fair and equitable, and it afforded an opportunity to stop the vacuum cleaner on the other side of the (Ohio River) from sucking up Kentucky money," Butler said of the Clark-sponsored bill.

Clark said staff had to "baby sit" racetrack officials during the negotiations, and that the industry was in "quicksand, and it kept moving around." Clark said no gambling bill would pass unless it contains provisions for non-track casinos.

The bill currently calls for five racetrack casinos and four non-track casinos. In January, the industry attempted to gather support for a bill that would limit casinos to the eight tracks in the state.

"I think a lot of them don't want competition," Clark said of the tracks. "Just putting (gaming) at the racetracks is selfish and shortsighted."

No racing industry representatives attended the March 10 hearing. But Turfway Park president Bob Elliston, contacted by telephone, said the industry was willing to compromise, and the proof is in the fact it supported a constitutional amendment this year, and also agreed to non-track locations as they long as they contributed some revenue to the racing industry.

"I would take exception to the comments when you look at where the industry has gone from where it has been," Elliston said. "We are willing to tolerate non-racetrack locations and a constitutional amendment (that included language for limited casino expansion). That's a sign of movement from where we've been.

"And in the absence of specific assurances to the public this is a limited gambling expansion, you can't get its support for this (measure)."

Butler, a former Louisville city official, said Churchill Downs, which under the bill would have been required to place its casino in downtown Louisville, has received tax breaks from the legislature over the years.

"To put it in blunt words, the tracks are greedy," Butler said. "They want to control the whole thing."

Clark also targeted Churchill as he wrapped up his remarks. "If there is anyone here from Churchill, when you want to move downtown, come see me," he said.

Churchill president Steve Sexton said the company was willing to put a casino downtown in return for a few changes in the bill. One would have included a 25-mile radius clause, and another would have eliminated a requirement for local referendums for track casinos.

"If we're going to pass a constitutional amendment, is there really a need for local option (votes) for track facilities that would have gaming?" Sexton said.

During the negotiations, no legislator noted Churchill is in the process of investing $121 million in the city by upgrading its Louisville racetrack, and might have to spend a similar amount to build an off-site casino. Sexton said the area around Central Avenue continues to be redeveloped.

Sexton also said there was a consensus on the part of the industry. He thanked Clark for working on the bill, but also noted how the horse industry "went forward with great compromise" to agree on certain provisions in the bill.

"I don't understand how it can be viewed that we're not willing to compromise in the spirit of moving the legislation forward," Elliston said.

The industry wanted the constitutional amendment question to specifically say where the non-track casinos would be located. The almost 100-page document included parameters for the casinos but no specific sites. Interestingly, according to the parameters, one of the casinos would have been located in the district of Senate president David Williams, a Republican who repeatedly has said a gambling bill would be dead on arrival.

Much has gone on behind the scenes. Some observers speculate that Clark couldn't drum up enough support for the bill, and therefore had to abandon it for now. Also, Clark and Churchill are said to be at odds. In addition, outside of industry lobbyists, the racing and breeding industry again had no presence in Frankfort.

There has been talk some well-heeled participants may help fund an organization that would be responsible for cultivating favor with legislators. Though horse racing and breeding is called Kentucky's "signature" industry by virtue of tax dollars and the economic and tourism engine it provides, it apparently has very little clout in the legislature.