- Associated Press - Wednesday, January 15, 2014

FRANKFORT, Ky. (AP) - Supporters of legalizing casino gambling in Kentucky started making their case to lawmakers Wednesday, touting expanded gambling as the best option to generate new revenues to meet the state’s funding needs.

The perennial issue received its first hearing of the 2014 General Assembly session when a House committee reviewed but didn’t vote on two gambling proposals.

One measure is a proposed constitutional amendment that would let Kentucky voters decide in the fall election whether they want to make casinos legal. A companion bill specifies how many casinos would be allowed, how the industry would be regulated and how the state’s share of revenue would be distributed.

Democratic Rep. Larry Clark of Louisville, the second-ranking House member, said the state’s ongoing budget problems offer a compelling reason to pursue casino gambling.

“We have to have a revenue source, and this is the best and easiest way to do it,” he said.

Clark’s companion bill would allow up to eight casinos statewide, including five run by racetracks.

The state would eventually take in an estimated $286 million in yearly casino-related tax revenues, he said, and half the amount under his proposal would go to education - spanning preschools to the universities.

Licensing fees granted to casino operators would generate at least $50 million more for the state for each casino at the outset.

A portion of casino revenues would bolster horse racing purses and breeders’ incentives to entice more horse owners to race in Kentucky. The state’s tracks have struggled to compete with venues in other states where casino money sweetens purses.

The push for casino gambling comes after years of lean budgets in Kentucky. The state endured about $1.6 billion in state spending cuts the past six years as tax collections plunged amid the deep recession.

A panel of the state’s top economists predicted state General Fund revenue will grow by nearly $500 million over the next two-year budget cycle that starts July 1. But some big-ticket demands, such as shoring up the government pension system, will consume much of the added revenue.

Gov. Steve Beshear, a casino gambling supporter, has warned lawmakers that he’s willing to propose “harmful cuts” to some government programs to free up money for education.

Beshear said Wednesday that one encouraging sign for the expanded gambling issue is the amount of conversations between House and Senate members.

“I do think that our prospects are better this year than they’ve been since I’ve been governor,” he said. “That doesn’t mean that it’ll happen. As we all know, this is a tough subject, a controversial subject.”

Clark and other supporters said public support for casinos is growing.

“I think it’s a travesty that we don’t give the voters of Kentucky an opportunity and the credit for being smart enough to be able to handle an issue like this,” said Rep. Dennis Keene, D-Wilder.

Keene, chairman of the House panel that reviewed the bills Wednesday, said expanded gambling opponents will get to make their case at a later committee hearing.

One of the opponents, Martin Cothran, a spokesman for The Family Foundation, told reporters afterward that casinos would siphon money from other parts of the economy.

He was skeptical about claims that the issue is gaining favor with lawmakers and the public.

“We’ve heard the same talk for 15 years,” Cothran said. “The Legislature has said ‘no’ for 15 years. We think we should just move on to other issues.”

In the Senate, the effort to legalize casinos is led by Senate Majority Caucus Chairman Dan Seum, R-Louisville. His proposal, in the form of a proposed constitutional amendment, would allow up to seven casinos.

It specifies that state casino revenue would go for job creation, education, human services, health care, veterans’ bonuses and local governments. A portion would boost racing purses and breeders’ incentives.

Clark said a casino-related constitutional amendment with such details would be “dead on arrival” in the House. He prefers a ballot measure calling for an up-or-down vote on legalizing casinos, coupled with a companion bill offering specifics.

“We’re not going to put specific things into the constitutional amendment,” he said. “Once you put one group in there, everybody else wants in.”

The House companion bill introduced by Clark would allow racetracks to operate five casinos, either at the track or within a 50-mile radius of the track.

Three casinos not operated by tracks would have to be in counties bordering other states. The sites could not be within 50 miles of a track or casino and must have a major highway running through the county.

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The House legislation is House Bills 67 and 68. The Senate legislation is Senate Bill 33.

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