In a 55-38 vote on February 12, the Kentucky House of Representatives passed Senate Bill 120, which will legalize historical horseracing (HHR) machines. The bill moved to the desk of Governor Andy Beshear, who indicated he’ll sign it and said the legislation is “crucial to ensuring that our signature Thoroughbred industry remains strong.”
Earlier the bill passed the Senate 22-15. In addition, the Kentucky Horse Racing Commission approved changes to the wording of statutes and regulations to align with language in the new legislation.
Specifically, the bill will change the definition of parimutuel wagering under Kentucky law to include HHR machines. The measure was filed in response to the September 2020 ruling by the state Supreme Court that some forms of HHR wagering were not parimutuel. The lawsuit leading to the ruling had been filed by the conservative Family Foundation. Following the passage of SB 120, the group’s spokesperson Martin Cothran said, “Logic and common sense won the legal fight in court, but money and political power won the political fight in the general assembly.” The organization is expected to challenge the measure in court.
Horseracing industry interests had argued that closing racetracks’ HHR facilities would destroy the industry and result in huge job losses. In fact, an HHR venue operated by Keeneland and Red Mile temporarily closed after the Supreme Court in January declined to reconsider its opinion. However, the venue reopened less than 48 hours after SB 120 passed.
During a three-hour debate preceding the vote on SB 120, several Republican lawmakers spoke strongly against the bill. State Rep. Chris Fugate said last November Kentucky voters gave Republicans a super-majority in the House with 75 members to Democrats’ 25, in order to “point Kentucky in a conservative, pro-life, pro-Second Amendment, pro-family direction.
“Sometimes we come to Frankfort and our values start to get changed, because there’s a lot of pressure at this place, a lot of money at stake,” Fugate continued. “But gambling is not going to fix–slot machines are not going to fix—the troubles of Kentucky.”
State Rep. David Hale, a Republican pastor, said SB 120 “is not about jobs. It’s about greed for a greedy industry and a greedy corporation. It will continue to increase heartache and tragedy and inflict a lot of suffering and pain upon people if we pass this bill.”
Speaking on behalf of the measure, state Rep. Adam Koenig said passing the bill was necessary if Kentucky wanted to remain the horse capital of the world. He asked, “Do we have enough signature industries that we can afford to lose this one? Do we have so many jobs that we can kill off thousands of them?”
Besides morality and jobs, another issue was increasing the tax rate on HHR machines. State Rep. Mary Lou Marzian said raising the tax rate could generate an additional $100 million in annual tax revenue for the state.
Commenting on a new HHR tax structure, Beshear said, “Each of our major tracks committed to enacting a more fair and equitable tax structure this session” as they worked to help pass the bill. He added, “This is what can happen when we stop fighting and work together.”
Bettors in Kentucky wagered more than $2 billion on HHR machines in the past fiscal year. Although one facility was closed for close to a month, revenue from HHR gambling increased by more than 32 percent for the first six months of the current fiscal year. Through the end of January, more than $2.2 billion was wagered statewide, generating about $158 million for the racetracks and $14 million for the state’s general fund.
