- Associated Press - Friday, February 21, 2014

FRANKFORT, Ky. (AP) - A state Supreme Court ruling on Instant Racing gambling machines drew a swift response Friday from some Kentucky lawmakers, who began drafting legislation to reinstate a tax on the slot-like games.

The state’s high court ruled Thursday that Kentucky can license and regulate Instant Racing.

But the justices returned the case to a lower court for more arguments on whether Instant Racing qualifies as a horse race or is illegal gambling. The Supreme Court also ruled that the Kentucky Department of Revenue lacks the authority to collect excise taxes on wagers placed on Instant Racing games.

House Speaker Greg Stumbo said Friday that lawmakers should take action in the coming weeks to tax the games. Failing to do so would provide a windfall for tracks offering the gambling machines, he said.

“The alternative would be to allow the racetracks that are currently licensed to conduct that activity to simply keep all the profits,” Stumbo, D-Prestonsburg, told reporters. “It doesn’t make any sense to do that.”

Instant Racing games allow people to bet on the outcome of old horse races without knowing which contests they are betting on. The game is offered at Kentucky Downs in Franklin and Ellis Park in Henderson.

Senate Majority Leader Damon Thayer, an Instant Racing advocate, said Friday that it’s “pretty unlikely” that senators would want to delve into an issue still being hashed out in the courts.

“On the face of it, if the General Assembly authorizes a tax, it in effect authorizes Instant Racing,” Thayer said. “I just don’t think there’s a sentiment to do that while the issue is still being adjudicated.”

Stumbo, a former state attorney general, said such an interpretation might not be the case.

“The way I interpret the case … is that it’s going to come back to the definition of pari-mutuel wagering,” he said. “And that’s what the court has to determine. The General Assembly wouldn’t legalize the conduct. The General Assembly would just say in the event that it occurs, here’s the taxes that would be paid on it.”

Senate President Robert Stivers, R-Manchester, said the Supreme Court ruling had prompted discussion among Republican and Democratic lawmakers about “what it meant.”

Thayer, R-Georgetown, said that for the sake of Instant Racing supporters and foes alike, “it would have been nice if the court had ruled with some sort of finality. But it clearly did not. It’s a mixed report. And it’s probably going to have to continue working its way through the court system.”

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