Politics & Government

House panel discusses gambling bills but wants Senate to take action first

The screen of a new Instant Racing electronic gambling machine is seen at Kentucky Downs during a media preview day on Wednesday, August 31, 2011 in Franklin, Ky. Kentucky Downs is the first in the state to have Instant Racing machines. Photo by Luke Sharrett
The screen of a new Instant Racing electronic gambling machine is seen at Kentucky Downs during a media preview day on Wednesday, August 31, 2011 in Franklin, Ky. Kentucky Downs is the first in the state to have Instant Racing machines. Photo by Luke Sharrett

FRANKFORT — Neither the state Democratic-controlled House nor the Republican-led Senate wants to go first in handling a proposed constitutional amendment to expand gambling in Kentucky.

House Speaker Pro Tem Larry Clark, D-Louisville, said Wednesday that House Democratic leaders want any expanded gambling amendment to originate in the Senate.

He also said the House will not approve an amendment that puts restrictions on how the state can spend money generated by gambling.

"If it's not a clean amendment, it's dead on arrival in the House. We're not going to put specific things into the Constitution," Clark said.

Senate President Robert Stivers, R-Manchester, said any constitutional amendment to expand gambling should start in the House.

The positions by Clark and Stivers underscore the level of distrust between the two chambers in handling the controversial subject of expanded gambling, especially in a year when Republicans are trying to wrest control of the House from Democrats for the first time since 1920.

Clark has two bills on the issue.

House Bill 67 calls for a constitutional amendment to let Kentucky voters decide in November whether they want casino gambling in the state. It would "allow the General Assembly to permit casino gambling by general laws."

HB 68 outlines a plan to license and regulate casino gambling at five horse racetracks and three standalone casinos.

The licensing and occupations committee, headed by Rep. Dennis Keene, D-Wilder, didn't take a vote Wednesday on Clark's proposals. Keene said the panel will hear testimony Jan. 22 from opponents of the legislation and decide later whether to hold a vote.

Sen. Dan Seum, R-Louisville, has his own proposed amendment to expand gambling.

It would allow casino gambling at no more than seven places in the state, with 10 percent of the revenue guaranteed "to promote equine interests" and the state's share dedicated to "job creation, education, human services, health care, veterans bonuses, local governments and public safety."

Clark told the House committee that recent polling shows 72 percent of Kentuckians would vote for his legislation, and only 57 percent support Seum's amendment. Clark told reporters that the statewide poll of 600 Kentuckians was conducted by "an outside source." He declined to provide details about the poll.

Seum, the Senate majority caucus chairman, said it has not yet been decided which chamber will first handle a constitutional amendment on expanded gambling.

"I'm not willing to change my bill at this time, but maybe once we pass it out, I could be open to negotiations," he said.

A pro-casino group named Kentucky Wins is pushing for a constitutional amendment to allow casino gambling. Kentucky Wins co-chairman Ed Glasscock, a Louisville attorney, said Wednesday, when asked whose plan he prefers, that his group has decided to leave it to the lawmakers to "decide what's in the best interest of the citizens."

Clark and a co-sponsor of his bills, Rep. David Osborne, R-Prospect, said their legislation could generate $830 million in total gambling revenue each year, with $286 million going to the state.

If Clark's proposed constitutional amendment passes in the 2014 election, the enabling legislation would take effect in late 2014, he said. That would result in the award of licenses and generation of gambling revenue for the state in 2015.

He said fees for licenses initially would cost $50 million, with a $5,000 fee to renew them every five years.

Clark's plan calls for the creation of a Kentucky Gaming Commission to issue licenses and regulate gambling sites.

Under Clark's plan, state revenue generated from gambling would be distributed as follows: 50 percent for education, 10 percent for stabilization of public pensions, 25 percent to the state General Fund, 4 percent for municipal public safety, 4 percent for drug and alcohol treatment, 4 percent for county public safety, 3 percent to locales that have expanded gambling to pay for safety and security, and 0.15 percent of adjusted gambling revenue, with a limit $2 million a year, to a compulsive gamblers assistance fund.

Tracks holding gambling licenses would be required to set aside 14.5 percent of adjusted gambling revenue for purses and other racing and breeding interests.

The legislation would require tracks to increase the number of live races by 10 percent during the first five years they are licensed to conduct casino gambling.

Of Kentucky's seven neighboring states, all but Virginia and Tennessee allow casino gambling.

Past efforts in Kentucky to expand gambling have failed because of horse industry infighting and reluctance by some lawmakers who worry about the impact of expanded gambling on families.

Martin Cothran, a spokesman for Lexington-based The Family Foundation, which opposes expanded gambling, predicted that legislators who vote for such expansion will be more vulnerable in running for re-election.

Many citizens will be "upset" with lawmakers who allow more gambling in Kentucky, Cothran said.

Clark dismissed that contention. "They've been saying that for 20 years. They said it on the lottery. They said it on charitable gaming. We've addressed compulsive gambling, but that's going to be their theme."