It wasn’t an encouraging week for those wanting to expand gaming in Kentucky.
The state’s Horse Racing Commission Chairman Frank Kling announced the commission will not consider Churchill Downs’ and Keeneland’s joint applications to build two new racinos near the Tennessee border. Kling emphasized commissioners had told all racetrack operators in the state “over the last several months” they would not review new applications for racetracks.
Churchill Downs and Keeneland together want to build a small Quarter Horse track in Corbin and a small harness track in Oak Grove. Both would run limited races to meet the state’s requirement for offering historical racing machines. The total budget for the proposed tracks would be $80-$90 million, said Keeneland Chief Operating Officer Vince Gabbert.
The Oak Grove track would serve the same market as Kentucky Downs, which recently concluded its best-ever racing season. Kentucky Downs officials, however, said it makes “no sense” to build a new, competitive track. Kentucky Downs races only a few days per year and also offers historical racing machines.
The Kentucky Horsemen’s Benevolent and Protective Association, which represents horsemen in the state, and the Kentucky Thoroughbred Association both expressed approval of the two proposed racetracks.
Prior to the rejection by the racing commission, Keeneland Chief Executive Officer Bill Thompson said, “This coming together of our companies sends a clear message. We’re joining together to bolster innovation for an industry vital to Kentucky’s future.”
Churchill Downs Chief Executive Officer Bill Carstanjen added, “Churchill Downs and Keeneland share a deep commitment to making Kentucky’s horseracing industry the very best version of itself, and the new racing facilities in Corbin and Oak Grove will help us achieve this by generating much needed funds to increase purses and breeders’ incentives.”
Meanwhile, Democrat state Reps. Dennis Keene and Rick Rand recently pre-filed Bill Request 149 which would expand gambling and generate $325 million in one-time fees and an estimated $500 million in new revenue over the state’s two-year budget period. The lawmakers said the funds would help plug the state’s projected $33 billion pension deficit over the next 30 years. The bill would require a public referendum to change the state constitution. House Democratic Caucus Chairman Keene said, “This is the start of the discussion. I’m refusing to look at that and say, ‘You can’t do that.’ At least this is something positive.”
Currently, Kentucky allows parimutuel betting at its seven racetracks and also has a state lottery. Under the proposal, no more than four casinos would be allowed where they’re approved by host communities, and horse racetracks that already conduct parimutuel wagering. The Kentucky Lottery Board would be expanded to include the new facilities, and operators would pay a gaming tax of 31 percent. In addition, casino patrons would be required to pay an entry fee of $3 per day.
In a joint statement, Keene and Rand said, “Casinos are already located along all of Kentucky’s borders and those states are reaping the benefits of additional tax revenues. Kentucky’s lottery gambling is highly successful and by expanding existing gaming venues to allow for casino-type games, we will grow a new revenue source to help us catch up on the pension shortfall.”
Rand added, “Based upon actuarial assumptions, and looking at revenue generated from our neighboring states, this could be a windfall for Kentucky. Initial license fees for casinos would generate one-time $325 million in fees followed by $236 million annually.”
In response to the proposed legislation, Senate Majority Floor Leader Damon Thayer tweeted simply, “Nope.” Governor Matt Bevin stated expanded gambling was not “going to happen while I’m governor.”
He said, “We’ve previously had people who ran for the seat of governor with that as their primary driver when they had party of like affiliation who couldn’t get that task done. There’s less appetite even now than there was then.” Bevin said expanded gambling’s financial benefits would not offset the “societal costs.”
Keene said, “That’s their prerogative if they want to dig their heads in the sand and not look for revenue sources. Before we look at a plan that involves cuts to retirees’ benefits, we have opportunities to bring new revenue that will be designated to the pension fund.” Rand added, “The uncertainty in the pension system at this time is leading to a mass exodus of experienced teachers, state police officers and state and county workers who will flood the retirement system. Do voters want to allow the new revenue from expanding gaming to build the pension fund or would they rather have cuts made on the backs of the state’s over 100,000 retirees? It’s time to put the gaming issue on the ballot so the public can have their say on this issue.”
