Franklin County

Slots bill gets its first hearing

FRANKFORT — A bill to allow electronic slot machines at Kentucky racetracks will probably get an overhaul in coming days, but still could come up for a committee vote by mid-February, said Rep. Dennis Keene, D-Wilder.

Keene, chairman of the House Licensing and Occupations Committee, said "the next time (House Bill 158) comes before this committee, it will be voted on." The panel held an informational hearing Wednesday on the legislation sponsored by House Speaker Greg Stumbo, D-Prestonsburg.

The bill would allow video lottery terminals under the auspices of the state lottery laws rather than an amendment to the state's constitution. Stumbo said the state could earn $235 million in tax revenue the first full year of operation.

Keene said he thinks his committee will vote in the second week, "if not sooner," of the 30-day session that begins Feb. 3. He expects the committee to pass the bill and said that with some "tightening," it could go to the full House for a vote without going through the House budget committee, which generally reviews all revenue-generating bills.

Senate President David Williams, R-Burkesville, has said he opposes any expansion of gambling. "There will be some changes to this bill," Keene said. "I think it will have to be worked very hard to get it passed. But we don't hear bills that we don't intend making a decision on. And I think that will happen."

Rep. Larry Clark, D-Louisville and Speaker Pro Tem, said those changes will have to include raising the fees racetracks would pay to apply for a license to put in slot machines. Stumbo's bill set the fee at $25,000. Clark, a supporter of expanded gambling, called that "an insult" and told Stumbo and track representative Nick Nicholson, president of Keeneland, to come back with a different figure with more zeros.

Clark also opened the door to revising the revenue split between the state and the tracks, something Stumbo said he was amenable to considering. Currently, the legislation would give the state roughly 25 percent of the taxes on the first $100 million in revenue and 35 percent of the taxes on anything above $100 million, with the rest going to the horse industry in purse and breeders' subsidies and track revenue. "We're not going to give a bailout to the (horse) industry," Clark said.

He also wants to specifically prohibit tracks from cutting racing dates without severe penalties, and to require tracks to publicly report ownership. Stumbo's legislation, as written, would limit disclosure to those with a 20 percent or greater stake in a racetrack.

Stumbo outlined the benefits of his bill, saying that within five years the state could reap up to $340 million annually in tax revenue, with about $190 million going to education. The state is looking to plug a forecast $456 million budget shortfall by July, but Stumbo conceded that this bill is unlikely to help with that. "But I think it could help next fiscal year with an advance construction schedule," Stumbo said.

Opponents criticized the bill on several fronts. Martin Cothran, spokesman for Say No to Casinos, said that voters and lawmakers who passed the constitutional amendment in 1988 to allow a state-run lottery were not approving electronic slots. "This bill can't possibly do what (Stumbo) claims," he said.

Gambling has been hit harder than other economic sectors by the global recession, he said. "This year can't promise any friendlier climate. People just aren't gambling like they used to."

The Rev. Nancy Jo Kemper, executive director of the Kentucky Council of Churches, said allowing slots parlors at racetracks will hurt the state-run lottery, charitable gaming and, in the long run, horse racing. "I think the horse industry that I love will be destroyed by playing with this fire. Twenty years and it will be taken over by the slots industry," Kemper said.

She said the state needs to explore other economic incentives to help the horse industry, which is facing economic threats from other states with purses and breeders' funds fueled by expanded gambling.

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