- Associated Press - Thursday, February 4, 2021

FRANKFORT, Ky. (AP) - Kentucky lawmakers started advancing a bill Thursday to prevent the unplugging of historical racing machines that have expanded into lucrative ventures for the state’s horse tracks.

The measure cleared the Senate Licensing and Occupations Committee and heads to the full Senate, where its prospects are bolstered by support from Senate President Robert Stivers and Senate Majority Floor Leader Damon Thayer. In the House - where it would go if it passes the Senate - the proposal is backed by Speaker David Osborne.

Despite those endorsements, anti-gambling opponents vowed to mount strong resistance when the measure comes up for more action in the Republican-dominated legislature.

“From here on out, the bill’s chances start going down pretty dramatically,” Martin Cothran with The Family Foundation said after the Senate panel advanced the measure.

The foundation is a conservative group that has waged a long-running legal fight against the spread of the slots-style betting machines.

The measure seeks to fix flaws that led Kentucky’s Supreme Court to rule that at least some forms of wagering on historical horse racing don’t meet pari-mutuel wagering standards under state law. The bill would insert such operations into the definition of pari-mutuel wagering.

Fallout from the court ruling began recently when one of the state’s historical racing venues, operated jointly by Keeneland and Red Mile in Lexington, closed temporarily.

Historical racing machines allow people to bet on randomly generated, past horse races. The games typically show video of condensed horse races. Bettors in Kentucky wagered more than $2 billion on historical racing machines in the prior fiscal year.

Those revenues help support Kentucky’s renowned horse industry - benefiting tracks, horse farms, support businesses, communities and tourism, supporters said Thursday. The ventures have pumped money into race purses and breed development funds to make Kentucky tracks more competitive with with tracks and horse breeding operations in other states. But casino-backed tracks in other states are often still able to offer higher race purses, the Senate committee was told.

“If you go anywhere in the world and you tell someone you’re from Kentucky, they’re going to know horses and they’re going to know the Kentucky Derby,” horse trainer Tom Drury said. “We’re supposed to set the standard. We’re supposed to be the ones at the head of the table. And right now we’re struggling. The smaller tracks are really struggling. The smaller trainers are struggling.”

Supporters also pointed to the economic benefits of historical racing to communities. The Oak Grove Racing, Gaming & Hotel operation near the Tennessee border created about 400 jobs, said Kelli Pendleton, president/CEO of the Christian County Chamber of Commerce. The development has spurred higher restaurant and hotel revenues and local businesses report increased sales, she said.

The Family Foundation warned that legal problems for the machines wouldn’t end if the bill passes, possibly foreshadowing another court showdown over historical race wagering. The group says a change to Kentucky’s constitution is needed to make the operations legal - an approach that supporters of historical racing say isn’t needed.

Cothran told the Senate committee that the bill seeks “to bring the law into alignment with the actions of the tracks, and in doing so making a mockery of the constitution.” The group also says such wagering drains money from the poor to benefit deep-pocketed racing interests.

Meanwhile, several advocacy groups have urged lawmakers to raise the tax rate on historical horse racing to boost state spending on education, health care and other services. The tax issue could come up if lawmakers consider any revenue measure as they craft a new state budget.

While wagering on historical racing operations exceeded $2 billion in the past fiscal year, the tax collected on historical racing was only $33.8 million, with $15.1 million going to the state General Fund, the Lexington Herald-Leader reported. That’s because lawmakers several years ago set a lower tax rates for historical racing than it had in place for live races and simulcasting.


The legislation is Senate Bill 120.

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