Gov. Steve Beshear unveils gambling amendment
Beshear's plan would allow 7 casinos, 5 at tracks
12:52 AM, Feb. 15, 2012
Written by Gregory A. Hall
FRANKFORT, KY. — In what may be his last realistic chance to win approval of expanded gambling in Kentucky, Gov. Steve Beshear unveiled a long-anticipated proposal for a constitutional amendment Tuesday that would allow up to five racetrack casinos and two at other sites.
The proposed amendment — Senate Bill 151, sponsored by Sen. Damon Thayer, R-Georgetown — contains a list of potential uses for the revenue that would be generated, including education and local government, along with help for the horse industry.
Details about how to spend the tax money would be dealt with in subsequent legislation should the amendment pass, though questions were raised almost immediately about the amendment’s language regarding that issue.
Both Thayer and Beshear said at a Capitol news conference that arguments can be made for or against expanded gambling.
“But there is no reasonable argument that can be made about the purpose of this amendment, which is simply to let the people decide,” Beshear said.
“At the end of the day, I trust the people of Kentucky,” Thayer said.
Beshear said he offered no specific revenue projections because it’s not clear where the casinos would be located.
But “it’s obvious that it will be in the hundreds of millions of dollars,” he said, citing the potential for one-time license fees and annual tax revenue. “We all know that it’s going to be a significant amount of money.”
Kentucky has eight tracks and a ninth license available that has never been awarded.
Thayer’s bill does not specify which tracks would get casinos, or where the nontrack casinos could be located. However, the nontrack casinos couldn’t be within 60 miles of a track.
To win passage, a constitutional amendment requires three-fifths approval in both chambers — 60 House members and 23 senators — and ratification by voters in the general election.
Beshear and others have long viewed the Republican-controlled Senate, chiefly President David Williams of Burkesville, the unsuccessful Republican candidate in last year’s governor's race, as the main stumbling block to expanded gambling.
Williams said Tuesday that language in the bill would force the legislature to create at least one racetrack casino license and at least one free-standing license if the amendment passed. Absent creating the maximum allowed, Williams said, “Every session of the General Assembly in the future would be spent on determining how many of those would be authorized and which tracks would get them.”
He also criticized the 60-mile provision, saying it could give a Churchill Downs casino a monopoly in an area that contains more than 20 percent of Kentucky’s population.
“I’m not aware of any place else in the United States of America where any private company is given a constitutional guarantee for a monopoly,” Williams said.
Williams said that the bill will be sent to Thayer’s State & Local Government Committee but that he couldn’t predict the vote there. That committee approved a bill two years ago to allow the slots-like Instant Racing game.
Within hours of the bill’s filing, its language was already being hotly debated, including by Sen. Dan Seum, a Louisville Republican who is the majority caucus chairman and sits on Thayer’s committee.
Seum said that if a vote were taken now, he couldn’t support it — even though he has said previously he is inclined to support expanded gambling.
He said promising racetrack licenses and specifying a distance from competition fails to maximize the potential revenue to the state that could come from open bidding because “you’ve given them away.”
As for potential revenue, the bill says the money may to be used for “job creation, education, human services, health care, veterans programs, local governments, public safety and the support of the horse industry.”
Beshear and Thayer said that is meant to be a finite list, but Williams said the language allows the money to be spent anywhere and doesn’t require tax revenues for the horse industry.
“It might as well say that the money goes into the General Fund,” Williams said, “because the purposes named are not exclusive and name virtually everything that you have, with no percentages.”
He called the language superfluous and designed only to win voters’ approval.
Thayer has said he believes the bill, which has 10 co-sponsors, has a good chance to emerge from his State & Local Government Committee. Other Republican sponsors are Senate Majority Whip Carroll Gibson, of Leitchfield, and Sen. Tom Buford, of Nicholasville. Gibson was one of about a dozen legislators of both parties and houses who attended Tuesday’s news conference.
Agriculture Commissioner James Comer, a Republican, also attended the news conference and said he supports the amendment.
“I don’t understand why we can’t put the fate of Kentucky in the hands of Kentuckians,” Comer said.
Beshear had hoped to release the proposed amendment in the first days of the 60-day legislative session, which passed its 28th day on Tuesday. But he held off at Thayer’s urging because of uneasiness by some potential supporters who didn’t want to face a controversial vote before redistricting was finished and the candidate filing deadline passed.
Bitter redistricting battles over both the congressional and legislative maps put virtually every major issue — including gambling — on hold. Final approval of the congressional maps came Friday, as did a revised legislative filing deadline — after a Franklin Circuit Court judge declared the new legislative maps unconstitutional.
Questions over redistricting, however, could still pose problems for the amendment. The legislative redistricting issue remains in the courts on appeal — and the issue could be sent back to the legislature. That could mean a reopening of the filing period.
Tuesday’s filing of the proposed amendment comes four years to the day after Beshear — then fresh off winning his first term in a campaign in which expanded gambling was the centerpiece — unveiled his first proposal. It would have allowed up to 12 casinos, which the House lowered to nine before the amendment ultimately failed.
One of the criticisms of that proposal was that it was filed late, on the 27th day of that 60-day session.
But Beshear and Thayer have said they believe there’s enough time this year for legislators to take up the amendment.
“We have plenty of time to pass this measure,” said Beshear, adding that he doesn’t know of any votes that he’s lost during the redistricting process.
Although recent years’ public polling has repeatedly shown support for expanded gambling — or at least allowing voters to decide the issue — the track record for such bills in Kentucky is littered with failures. Bills have been introduced in at least nine legislative sessions over the past 11 years.
Several proposals have passed House committees, but only a video slots bill during a 2009 special session actually passed one of the chambers. And that bill died in a Senate committee.
And opposition to expanded gambling remains considerable.
Martin Cothran, spokesman for the Family Foundation of Kentucky, one of the most outspoken opponents of expanded gambling, said in a statement Tuesday that Thayer’s bill “is an attempt by wealthy horse track owners and casino interests to buy their way into the constitution like box seats at a ball game.”
He said Kentucky “has never amended its constitution to favor one industry like this.”
One potential problem for Beshear is House Speaker Greg Stumbo, a Prestonsburg Democrat who has supported expanded gambling but would prefer to authorize it by a change in law, without a constitutional amendment. Stumbo has said he is open to considering an amendment if it passes the Senate.
He attended Tuesday’s news conference but declined to speak when asked if he wanted to by Beshear.
Afterward, Stumbo said he supports Beshear, whose political clout with the legislature will quickly diminish as the end of his second and final term draws closer, and “I want him to succeed.”
But he added: “I would very much like to see the language changed. … There’s a whole laundry list of issues that you can just go down and pick out that are big questions.”
Among those, he said, are concerns about granting a set of licenses to a particular industry and specifications about how the revenue is to be used.
Thayer said Stumbo should work through Beshear to address any concerns on the language.
“We’ve got time to make a change if that’s necessary,” he said.
Beshear said House leadership “has assured me that they’re going to work with us and if we can pass something in the Senate, that they’ll make sure that we get it on the ballot in the House.”
Thayer said that he expects the bill to be heard in his committee next week and that Beshear and Comer will testify, as will Cothran.
He said he believes it can pass his committee and “could go either way” in the full Senate.
Senate Minority Leader R.J. Palmer of Winchester said he believes all 15 Democrats could be persuaded to vote for the amendment — meaning it would need only eight GOP votes to pass.
“We’re close,” he said. “ ... I anticipate that when it hits the floor, we’ll be at 15.”
Racing industry leaders said they were glad the bill has been filed.
Brett Hale, Churchill’s top governmental affairs vice president, said the Louisville-based company is “very supportive” of the concept discussed by Beshear.
Reporter Gregory A. Hall can be reached at (502) 582-4087.