Proposed constitutional amendment would allow seven casinos in Kentucky

jpatton1@herald-leader.comFebruary 14, 2012 

FRANKFORT — Backed by a bipartisan coalition of lawmakers of both chambers of the General Assembly, Gov. Steve Beshear introduced a constitutional amendment Tuesday to allow casinos.

The bill, filed by Sen. Damon Thayer, R-Georgetown, would allow as many as seven casinos — five at horse tracks and two elsewhere.

"We're here today to announce the filing of legislation to put a constitutional amendment on the ballot that lets the people decide once and for all," Beshear said. Citing polls that show high interest in a vote, he said: "The question is simply, do we as leaders listen to our people, or do we ignore them?"

The bill has 10 co-sponsors — two Republicans and eight Democrats, including Senate Minority Leader R.J. Palmer, D-Winchester.

House Speaker Greg Stumbo, D-Prestonsburg, did not speak and expressed tepid support for the bill.

"I have promised the governor that I would stay open on this," Stumbo said later.

That could foreshadow a bumpy ride over the next few weeks: Senate President David Williams, R-Burkesville, opposes the bill.

Williams raised several issues. He said the bill will grant an unprecedented constitutional monopoly to one industry: racetracks.

"It would appear this would require the General Assembly to give at least one racetrack license and at least one non-racetrack license, whether the General Assembly can agree on whether the racetrack should get it or not," Williams said later.

"What if the General Assembly were to decide the horse industry does not deserve protection? This amendment does not guarantee them anything."

Senate Majority Leader Robert Stivers, R-Manchester, took issue with the amendment language that says the General Assembly "shall" act on expanded gambling.

"Do we have to pass something immediately?" he asked. "What if there is not any agreement that can be reached between the House and the Senate on the framework of a constitutional amendment?

"Does that mean — this may sound crazy — that we are in session until perpetuity until we do?"

If the General Assembly approves the amendment, it would go on the November ballot for a statewide vote.

Beshear did not release new revenue projections, but he said that he expected it to be "significant" based on a recent economic study by the tracks that showed $451 million in 2010 gambled by Kentuckians at out-of-state casinos. "We need to keep that money at home," Beshear said.

The governor said additional tax revenue and licensing fees from casinos could buoy the state budget and help the Kentucky horse industry, which is threatened by competition from other states with casinos.

Horse industry representatives hailed the bill afterward and said they are committed to providing the money to make their argument to lawmakers and to the public.

"I'm encouraged to see the bipartisan group of leaders bring it to the table," said Bob Elliston, president of Turfway Park in Northern Kentucky. He said the tracks are willing to finance a campaign to pass it, if it gets on the ballot.

"Have to get your message out there. ... That means resources," he said.

Recent polls by racetracks and by the state Republican party found that more than 80 percent of Kentuckians want to vote on the issue regardless of whether they support or oppose expanded gambling.

Thayer said he has co-sponsors from both parties for the bill, which is likely to go to the Senate's State and Local Government Committee, which he chairs.

He plans to hold a hearing and probably a vote on the bill on Feb. 22.

"There are good arguments on both sides of this issue that should be played out," Thayer said.

Beshear and Thayer were joined at the announcement by Agriculture Commissioner Jamie Comer, who could become a key Republican influence. Comer campaigned on supporting the horse industry with expanded gambling and will testify at the hearing along with Beshear.

"We want to do everything we can at the Department of Agriculture to save our signature agricultural industry in Kentucky, the equine industry," Comer said. "There's been a lot of debate about this issue, but I don't understand why we can't put the fate of Kentucky in the hands of Kentuckians. I think the time is now. This industry deserves a vote on this, and I'm going to do everything I can to support this issue."

The Family Foundation, a conservative advocacy group that opposes casino gambling, also will testify.

Martin Cothran, a Family Foundation spokesman, said it is a mistake for lawmakers to see this as a question of letting the people decide.

"This bill is an attempt by wealthy horse track owners and casino interests to buy their way into the Constitution like box seats at a ball game," Cothran said.

Racetrack and horse-breeding interests were significant donors to Beshear's elections and most recent inauguration.

The legislation filed Tuesday would build in protection for tracks by not allowing any freestanding casino within 60 miles of a track, regardless of whether the track gets a casino. It also specifies that revenue from the gambling would go to "support of the horse industry," and job creation, education, human services, health care, veterans programs, local governments, and public safety.

The one-paragraph amendment would leave all other details of how gambling would be regulated to be decided by the General Assembly afterward, in stark contrast to the legislation that Beshear filed on Feb. 14, 2008, which had a 136-page companion bill to spell out details for a dozen casinos.

This time, the numbers and the details are more sparse.

"I think people will like the fact that there will be a limited number of casinos," specifically limited to places where gambling already takes place, Beshear said. "The vast majority don't want it in their own back yard. ... The enabling legislation can address any number of regulatory concerns. We have on purpose kept this simple, left a lot of details to be worked out."

On the question of carving out a lucrative new business for one industry, Beshear said no particular racetrack would be guaranteed a license, and the eight existing tracks would have to compete for five licenses. Because of the 60-mile restriction, Lexington could have only one casino even though it has two racetracks, Keeneland and The Red Mile.

Beshear said the intent to protect the state's position in racing and breeding is clear. Tracks and horsemen "feel comfortable that we've got their best interests at heart," Beshear said.

But those assurances are causing problems for the House, which is under Democratic control. Stumbo said that for the bill to pass the House, it will have to be changed.

"There are concerns about giving these constitutionally guaranteed licenses to private businesses," Stumbo said. "I think that if it's going to muster enough support, there is going to have to be some answer to that question. ... There is nowhere that we know of where a private license is constitutionally guaranteed. There is no body of law that tells us what rights flow with that type of guarantee."

Sen. Dan Seum, R-Louisville, said that if the amendment as written were to come for a committee vote today, he would not be inclined to vote for it, even though he has supported expanded gambling in the past.

Seum said that by designating licenses for tracks, the state could be giving away money that might be raised from bidding on casinos.

"If this is about generating money for the state, why are we giving the damn things away?" Seum asked.

Herald-Leader staff writers Beth Musgrave and Jack Brammer contributed to this report.Janet Patton: (859) 231-3264. Twitter: @janetpattonhl.

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