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Video slots bill's impact debated

The president of Keene land and the executive director of the Kentucky Council of Churches agreed Tuesday that allowing computerized slot machines at Kentucky racetracks won't solve the horse industry's problems or erase the state's budget deficit.

They also said they had no better ideas of how to raise the millions of dollars needed to make the horse industry more competitive and to balance the state budget.

But that's where they parted company during a debate at the monthly meeting of the Bluegrass Hospitality Association at Lexington's Embassy Suites hotel.

Keeneland President Nick Nicholson said the passage of House Bill 158 by the Kentucky General Assembly would remove an issue that has divided legislators for years and has impeded sweeping tax reform that might solve more of the state's problems.

But Nancy Jo Kemper, executive director of the Council of Churches, predicted that the passage of a bill to allow the so-called video lottery terminals at racetracks without first amending the state constitution to allow this new form of gambling would lead to financial disappointment and probably a court battle.

The video lottery terminals would be operated by the Kentucky Lottery Corp. So without a constitutional amendment to limit placement of the machines, Kemper said, there might be nothing to stop regular lottery venders from suing for the right to install slot machines in their businesses.

Kemper, who called HB 158 "dead" in its current form, said Kentucky needs "a slow, reasoned approach" to solving its financial problems. If a thoughtful solution included some expansion of gambling, she wouldn't automatically be opposed to it on moral grounds, Kemper said.

The horse industry is "vital to Kentucky and is showing serious signs of trouble," she added. It must be saved, but slots would be a long-term threat, not a solution.

Nicholson said many other states east of the Mississippi River have approved slot machines or casino gambling and are often using the revenue to increase the winners' purses at Thoroughbred racetracks.

Without such additional revenue, Keeneland will drop out of the top 20 U.S. racetracks in terms of purses by 2013, Nicholson said. Other tracks, such as Ellis Park in Western Kentucky, might not even exist by then due to competition from Indiana casinos.

"We are literally under siege from other states," he said. "Kentucky has a real vested interest in saving this signature industry" and the jobs it creates.

Video lottery terminals at seven state racetracks are expected to generate about $200 million a year, he said. One-third of the gross would go to state government under the current bill, but that would be far too little to eliminate the state's budget deficit.

Some of the remaining money would go to various tourism and horse industry purposes, including increasing purses to attract racehorses to the state's tracks.

"We can't find any other alternative (to slots)," Nicholson said.

He described HB 158 as a defensive measure for Kentucky's horse industry. "We have barely held our own (in recent years)," Nicholson said, "which is not good enough."