Allowing casinos at eight Kentucky racetracks would have an estimated $1.7 billion economic impact on the state during the casinos' first full year of operation, according to a study released Monday by the Kentucky Chamber of Commerce.
That would include $464.7 million in gaming tax revenue, $164.6 million of which would go to racing-industry programs, according to the Kentucky Gaming Market Analysis and Impacts Report, which was paid for by racing-industry interests.
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Eight casinos also would create nearly 11,000 full-time jobs with a payroll of $289.3 million, the study found.
"Through this comprehensive market analysis, we can see the overwhelmingly positive impact casinos at racetracks will have on Kentucky's economy and employment picture, in addition to helping preserve and grow Kentucky's signature horse racing industry," Brett Hale, senior vice president of corporate and government relations for Churchill Downs Inc., said in a news release.
Kentuckians spent $451 million at casinos in surrounding states in 2010, the report says.
"This study reinforces that it is time to keep Kentuckians' money in the commonwealth and create new revenue streams that benefit our state and its citizens," Vince Gabbert, vice president and chief operating officer of the Keeneland Association, said in the release.
Much of the projected revenue from casinos would come from Kentucky Downs, near the Tennessee border, with $365.5 million generated the first year.
Churchill Downs would bring in an estimated $251.2 million.
The study assumes one casino for Lexington, home to The Red Mile and Keene land. That casino was assumed to generate $170.1 million in revenue its first year.
But the study also assumes that $128.6 million in gross gaming revenue would be generated by a new track and casino in the London or Cor bin area. It was unclear who might operate such a track.
Michael Pollock, managing director for New Jersey-based Spectrum Gaming Group, the independent research firm that conducted the study, said Monday night that the inclusion of the non-existent track was based on "assumptions to develop a reasonable revenue model."
The study comes as the Kentucky General Assembly is in session, with expanded gambling once again on the table.
"We have long known that hundreds of millions of Kentucky dollars are flowing out of our state and into the budgets of surrounding states with expanded gaming — paying for their roads and their schools," Gov. Steve Beshear said in a statement Monday night in response to the study. "The fact that gaming could generate nearly $2 billion in Kentucky in the first year reminds us just how much we are losing."
However, the study also does not account for any loss of state revenue from other sources such as lottery ticket sales and sales taxes; that occurs, many say, when casinos cannibalize other forms of spending.
"Bringing casinos into Kentucky would divert money, not produce it," said Martin Cothran, spokesman for The Family Foundation of Kentucky. "This is money that is now being spent at local restaurants, at local retail stores in communities all over the state. It's going to take money away from other businesses and put it in the hands of rich tracks and their rich owners, some of whom are from out of state."
Economists who have studied the issue say casino gambling brings a negligible net revenue gain to state budgets.
Robert Ward, director of fiscal studies at the Nelson A. Rockefeller Institute of Government in Albany, N.Y., said in a recent Herald-Leader interview that new gambling operations typically benefit states' financial situations when they start, but that growth slows in future years.
"So gambling may represent a fiscal benefit in the short run, but it does not necessarily reduce budget problems in the long run," he said.
Beshear said he was "working with legislators and doing everything I can to ensure that voters can make their voices heard in November."
The Family Foundation issued a separate news release Monday saying it did not think Beshear has enough support in the state Senate to get a constitutional amendment to allow casino gambling on the statewide ballot in November.
"We've talked with enough members to know that the governor does not currently have the votes," Cothran said in the release.