Stumbo: Without slots, ‘we’re going to lose our horse industry’
By Janet Patton – jpatton1@herald-leader.com
State Rep. Greg Stumbo, D-Prestonsburg
New legislation that Rep. Greg Stumbo, D-Prestonsburg, plans to file for the upcoming legislative session would pour $15 million to $20 million from video lottery terminals into horse racing purses, something Kentucky racetracks say they desperately need to compete.
“I’m convinced if we don’t do something we’re going to lose our horse industry,” Stumbo said in an interview last week. “We may end up with just two tracks.”
His proposal also would bring in nearly $300 million in new revenue for the state to put toward needs like education and prisons at a time when Kentucky is facing huge budget shortfalls.
“Racino” states like Indiana, Pennsylvania and New York are ramping up competition for the state’s racehorses and breeding industry with purses and incentives fueled by expanded gambling.
A task force appointed by Gov. Steve Beshear to look at horse racing recommended on Monday increasing purses but did not offer any suggestions to pay for more prize money.
A draft of Stumbo’s bill proposes to dedicate 80 percent of the racetracks’ video lottery terminals revenue to purse enhancements, but Stumbo said that specifics of how to spend the money are still being debated.
The racing industry supports the measure.
“It may be too late to save the Thoroughbred industry but from my perspective as a Kentuckian I want to give us a chance to compete. It would be a shame to let this go through lack of action,” said Ron Geary, owner of Ellis Park in Henderson. “I’m hoping there may be a change of attitude as far as saving the horse industry … This bill makes so much sense.”
Geary, the other racetracks, and horse industry groups have lobbied unsuccessfully for expanded gambling for at least a decade. Now, more than a dozen states, including major racing states such as New York, Florida, Illinois and Louisiana, have some type of alternative gambling that could shore up purses.
“We are obviously hopeful the legislature is willing to improve our competitive position as it relates to surrounding states,” said Patrick Neely, spokesman for the Kentucky Equine Education Project, which has lobbied for expanded gambling. “The governor’s task force made it perfectly clear: the surrounding states are doing all they can to take our horses.”
As Keeneland president Nick Nicholson put it last week in the report to Beshear, “The threat to Kentucky’s horse industry is very real and it’s not long term; it’s imminent.”
Numbers compiled by the task force found that, due to recently added slots, purses in Indiana and Pennsylvania are expected to more than double next year. New York has awarded a contract for its Aqueduct racino and Gov. David Paterson on Tuesday proposed adding another at Belmont. Maryland voted to expand gambling in November, making Kentucky the only Triple Crown state without gambling-supported racing.
Beshear said Monday he will not look to expanded gambling to address the state’s $456 million budget shortfall for this fiscal year, which ends June 30. But Stumbo said he thinks gambling revenue could be needed down the road.
“We could limp through this fiscal year but what happens next year if this doubles? We could be facing a billion-dollar shortfall next year,” he said.
Stumbo, who is challenging Democratic Rep. Jody Richards of Bowling Green for Speaker of the House, said he will file the bill regardless of who wins that contest.
The bill would allow video lottery terminals at racetracks and not at any free-standing casino locations.
The video lottery terminals, which resemble electronic slot machines, would be regulated by the Kentucky Lottery Corporation, under the legislation. As attorney general, Stumbo issued an opinion that such lottery-style games would not require an amendment to the state constitution to be legal.
Stumbo said he’s hearing support for his proposal from members of the House and the Senate, and claims that this approach to expanded gambling does not carry the same stigma that doomed Beshear’s attempt earlier this year to bring casinos to the state.
Senate president David Williams, R-Burkesville, declined to comment. Williams has long opposed expanded gambling.
Sen. Damon Thayer, R-Georgetown, said he still believes a public vote on a constitutional amendment is needed to expand gambling, but he also believes Stumbo’s bill will refocus the debate on the need for purse subsidies at racetracks. “I hope we can get away from this silly debate on other casinos,” Thayer said.
The Legislative Research Commission estimates Stumbo’s legislation could generate up to $400 million annually in revenue for the state; about $110 million of that would replace revenue from the state’s portion of property taxes on motor vehicles and boats, which the bill would scrap.
The replacement revenue to the General Fund would come off the top. After that, 30 percent of the rest would go back to the tracks. Another 15 percent, or up to $25 million, would go to drug and alcohol rehabilitation, while 15 percent, or up to $25 million, would go to counties to pay for the housing of state inmates in jails.
Four percent, or up to $2.5 million, would be used to treat problem gambling, with the remaining 1 percent. or up to $2.5 million, going to Kentucky PRIDE, which cleans up dumps and addresses other environmental problems.
Any remaining money would go to the state Department of Education.
Estimates from the racetracks have estimated the state will get between $600 million and $700 million, Stumbo said.
He said the tracks are prepared to make significant investments in video lottery terminal facilities, which would have to be located on the racetracks’ grounds. Churchill Downs in Louisville is talking about a potential $900 million investment, Stumbo said.
The Lexington racetracks, which would have to share a license although they could put machines at both tracks, are talking about $750 million, as is Turfway Park in Northern Kentucky, he said.
About the Author: John Stamper is the accountability editor for the Lexington Herald-Leader. A native of Monticello, Ky., he has been with the Herald-Leader in a variety of roles since graduating from Western Kentucky University in 2000. Reach him at jstamper@herald-leader.com
Anonymous | Dec 20, 2008 | Reply
I’m all for it. Although I personally won’t use these machines, if it has the chance of saving our horse industry, eliminating my ridiculous personal property tax every year on a vehicle I only had to buy once, and put money into the already strapped general fund as well as rehabilitation programs, environmental programs, and education…then I say vote YES to ALL our legislators. Otherwise, you self-righteous millionares need to open your own checkbooks to bail out this state because you are the ones, by your inaction for so many years, that has ruined it.
daniel | Dec 20, 2008 | Reply
I think it will happen and the Governor can do an executive order at this time to force the lottery board to institute slots at tracks without any other legislation. The Lottery Bill from 1988 has already given KY the authority for casinos. Stumbo’s bill will stop the automobile tax, provide money for drug rehabilitation in county jails and provide revenue to the county jails. KY does not need another vote to do this. IT IS Written- go check the 2 Atty. General Opionons… Let’s see if the Gov. has the will to get it on..
nobrainer | Dec 20, 2008 | Reply
I’m fine with the idea of slots at the track, but the idea of “what’s left” over going to education when in one of the first sentences it says the money will go to education is hypocrisy. This should not be advertised as an education stimulus when “whatevers left” goes to educationonce again, Kentucky sidesteps the surest onvrsment for the Commonwealth’s future.
kyfoward | Dec 20, 2008 | Reply
This is a painless way to strengthen our horse industry and provide funding for other needed programs.
Tester | Dec 20, 2008 | Reply
zzzzzzzzmmmmm
Thunder Storm | Dec 20, 2008 | Reply
I don’t like the idea of poor people funding bigger purses for rich horse owners. Some of them pay more for one yearling than they need to expand purses.
You will never see a rich person play video lottery terminals at a race track. They will fly to Vegas or Atlantic City. Their ego’s wouldn’t allow anything else.
Then there is the most obvious thing this article says and it makes zero logical sense.
Stumbo is quoted as saying “Churchill Downs in Louisville is talking about a potential $900 million investment”
So Churchhill is willing to invest $900m to earn a portion of $15m to $20m from video lottery terminals
From the beginning of the story …”New legislation that Rep. Greg Stumbo, D-Prestonsburg, plans to file for the upcoming legislative session would pour $15 million to $20 million from video lottery terminals into horse racing purses, something Kentucky racetracks say they desperately need to compete.”
Then add the $750m the Lexington race tracks are willing to invest in lottery machines and you have a few race tracks willing to invest $1.65B, thats $1,650,000,000 to earn $15m to $20m.
Why don’t they save $1.45B and put that $20m into the purses themselves.
There is something else going on here. Something we are not being told. This makes no sense. IS this another PONZI scheme being put on us by our own elected leaders?
What it sounds like is the rich will not be as rich if the can’t scheme an extra $20m from the poor.
We were sold a bill of goods when former Gov. Wilkinson scammed us about the lottery saving our education system.
Continued …
IMHO | Dec 20, 2008 | Reply
Kentucky lost the edge to the horse industry a while ago. Go to Aiken, SC or Ocala, FL to recognize it. This is just another ploy by Beshear and his puppet Stumbo to push casino gambling in the state.
josh | Dec 20, 2008 | Reply
Cool. Let’s play find the hypocrisy with KY government:
KY government says gambling is bad.
KY government says gambling is bad, unless it’s wagering on horse races.
KY government says gambling is bad, unless it’s wagering on horse races OR it’s slot machine gambling to save the ability for people to wager on horses.
Yet I can’t play poker online or make a wager on anything else but horse races.
Who is the KY government really protecting here?
Jim Anderson Stivers | Dec 21, 2008 | Reply
And, later when Stubmo runs for Bunnings job he will have a financial source to draw campaign funds.
This just plain stupid.
Wasn’t it the Race Track people that did not want Casinos?
Guess where the greatest revenue source is for Casinos?
Naw don’t guess. You know.
Bill Adkins | Dec 21, 2008 | Reply
Argosy just kicked in $38 million in Ohio to defeat gambling there. I’m guessing the money is in Indiana.
Ohio’s and Kentucky’s money, that is.
Jim Anderson Stivers | Dec 21, 2008 | Reply
‘Children at risk of slot machine addiction’, warns gambling expert
By TIM SHIPMAN, Political Correspondent
Risk: Children could become slot machine addicts!
Millions of children will become gambling addicts because ministers are ‘naive’ about the dangers posed by their casino reforms, one of the world’s leading experts warned.
Prof Mark Griffiths hit out at Labour’s refusal to ban children from using fruit machines, branding ministers ‘extremely short-sighted’ about the threat to the under 18s.
In a report sent to ministers, he says the new Gambling Act, due to come into force next September, will pitch a generation of teenagers into a nightmare world of addiction, debt, drugs and crime that could wreck their lives.
Is all this worth the risk?
Jim Anderson Stivers
Read more:
http://www.dailymail.co.uk/news/article-414934/Children-risk-slot-machine-addiction-warns-gambling-expert.html
Jim Anderson Stivers | Dec 21, 2008 | Reply
If Gambling (slots) is not an addiction why then, the need for this:
http://www.iwanttostopgambling.co.uk/?cat=10
inspector | Dec 21, 2008 | Reply
What is bingo and the lottery, if they are not a form of gambling?
Clay | Dec 21, 2008 | Reply
Oftentimes, we are unable to see a sensible and sane solutions to our problems and rely on folks like Stevie Blunder to lead us around New Circle Road. He could not deliver last year and will not deliver this year without some help. 2021 is Greg’s year
Billy | Dec 22, 2008 | Reply
Let me get this straight…
Kentucky Downs, which runs 6 days a year, is now claiming it must have slot machines 365 days a year to stay in business.
This is a track that was purchased by a former Magna Entertainment executive last year. If they overpaid, then that is their problem. This has been Magna’s modus operandi throughout their existence.
We all know how much damage Magna has done to horse racing.
Slot machines cause many more problems than they cure. Families suffer evictions, repossessions, utility turn-offs, hunger and many other ills because hard-earned money is squandered on a slim chance for a temporary gain.
So soup kitchens, shelters and other safety nets in Kentucky will be forced to pick up the slack while the hard-earned money of Kentuckians is shipped off to Canada or Texas.
I don’t think so. A rinky-dink race track that races 6 days a year and runs slots 365 days a year is a sleazy slot parlor…not a race track.
Mr. Stumbo needs to come clean about his contributions from the race track owners who would benefit from this. It is too bad starving and homeless children could not contribute line his pockets so he would help them.
John Davis | Dec 22, 2008 | Reply
I doubt Kentucky Downs would be considered for the slot machines.
It is certainly not one of the significant tracks in Kentucky and is more of an anomaly.
Why it is still operational is really a mystery.
I made the mistake of running a horse there once and never will again. The track is uneven and dangerous to the horses.
The track is not worth saving. It would be better to run an extra day at Keeneland.
gavemylifetoracing | Dec 23, 2008 | Reply
For the record, Kentucky Downs, among the leaders in starters per race, has had a total of three fatal breakdowns in the last eight seasons. That is 1 per every 1,200 starters. Compare that to other track.
gavemylifetoracing | Dec 23, 2008 | Reply
P.S. Kentucky Downs is projected to be the leading casino in Kentucky (prox. to Nashville). But, Kentucky will never get casinos, or slot machines. This is a legislature that fought for years about allowing vending machines in schools. Maybe a shot in 2014, but the market will be established and oversaturated by then and the investments (note Gulfstream Park), won’t be profitable. Kentucky needs to change their business model for the smaller tracks to survive. Most likely, only Churchill and Keeneland survive.
John Davis | Dec 23, 2008 | Reply
If proximity to Nashville were so important, one would think that Dueling Grounds, Kentucky Downs or whatever it is now called would have managed more than 6 racing days per year.
Basically, they are an example of the problem in racing when an out-of-state operator buys a track, runs the bare minimum amount of races and hopes he can put slots in.
If they would have put the same energy into their race product as they do begging for slots, maybe they could have run 8 or 10 days or maybe even a real race meet.
I bet if the 2007 purchase contract for Kentucky Downs were made public, one would see the owners were only interested in slot machines.
In the case of Kentucky Downs, the argument that slots are needed to save horse racing is hypocritical. These out-of-staters are simply using horse racing as a shallow argument to line their own pockets.
I need my blood pressure meds. | Dec 24, 2008 | Reply
Until we give them what they want, they are going to continue their path of destruction across the State.
My question to them is this, are they going to allow the small business owners to bring back the games that kids love to play for .50 cents to win a prize or are they going to continue to Indict these individuals just trying to make a living?
But I for one will vote for gambling, the cigeratte tax, just tell me Gov. and Stumbo what it is to keep from taking anymore of MY pay check and taking away from the poor grand parents that are trying to raise thier grandkids because their parents are either unfit or not around,, don’t take the only monthly income away from them and force them to have to go to a foster home, or wait, you’re cutting that agency too, my bad.
Just tell us what it is going to take.
Might I also suggest you all giving up your big pay raise last year and if I might add, how about your annual pay for a year? Just a thought.
If Stumbo says it, it can't be true | Dec 28, 2008 | Reply
What is wrong with this site? It won’t accept my comments and hasn’t for weeks.
No name | Dec 28, 2008 | Reply
I am really getting frustrated with this site rejecting my posts.
Jim Anderson Stivers | Dec 28, 2008 | Reply
I am really getting frustrated with this site rejecting my posts.
No name . . .
I have noticed the same thing with regularity. Many times I post, but the post is not uploaded to the new software.
Tried to explain to the Herald Leader the problem. They did debug, but a few days later the same problem. Won’t shake hands with the current software.
It is my opinion the new software, from a different VENDOR is the problem. Of course it is the publishers privileged to change software, but this change, in my personal opinion, has failed to post hundreds of comments and limits the open discussions of the news and politics.
It is a problem and if the current software can not be updated and frequently debugged, then perhaps the old software allowed for more participation.
I also noticed there are many names I have seen in previous post, that just seem to had disappeared.
Pretty frustrating!
I just wanna say!
Jim Anderson Stivers
If Stumbo says it, it can't be true | Dec 28, 2008 | Reply
Actually, Mr. Stivers, I think someone or something is filtering viewpoints.
I have tried to express a particular opinion on the state’s budget situation in this thread and others, and always, without fail, that opinion does not “take.”
Jim Anderson Stivers | Dec 29, 2008 | Reply
I don’t think it is the HL filtering.
It is the new software.
If Stumbo says it, it can't be true | Dec 29, 2008 | Reply
Nope. Just tried to post my opinion and it did not go through.
If Stumbo says it, it can't be true | Dec 29, 2008 | Reply
We don’t have a budget crisis. It’s manufactured to scare up support for casino gambling.
If Stumbo says it, it can't be true | Dec 29, 2008 | Reply
Well what do you know? It published a one-line summary of my position. Praise the Lord!
Jim Anderson Stivers | Dec 29, 2008 | Reply
IMO< The Slot Idea was hatched while Stumbo was the AG. I am sure the statues has been researched but, then maybe not.
But, you can bet, NOW someone will go back and closely examine the old Wallace Wilkerson Fix or Education, the Lottery.
BOOK IT!
“A STORM OF RESISTANCE IS BUILDING ON THE ANTI GAMBLING SIDE!”
rick nevels | Dec 29, 2008 | Reply
F the horse industry and the tracks. Focus on real revenue and jobs. this horsey stuff is just a fantasy.
Ted | Jan 3, 2009 | Reply
I wonder what the real impact will be on Kentuckians if slots are allowed. When the lottery was introduced in Kentucky several years ago that idea was supposed to make a difference. Has it? Not really. The question is not “do we approve slots, gambling or or other lottery schemes”. The answer is we need to control spending and that starts within our own state government. Politicans are greedy. They have the best health and retirement benefits. Kentuckians are getting by on bread crumbs while they take trips to the beach and say the trips “are necessary”. I wonder how much money the politicans are pocketing from out of state “players”. Kentucky needs to rise up and clean house on election day. Citizens vote out the incumbents
Jim Anderson Stivers | Jan 4, 2009 | Reply
Say No and other structure, to counter the proposal of gambling, are already formed.
There does exist the chance our previous amendment for the lottery may cover the installation of slots, and without a public vote.
If Churchill Downs and Keenland are “hurting” so much whey then do they invision over one billion dollars in new expenditures to make a place for 1000 slot machines.
It would seem to me, if your business is failing then perhaps you need BETTER MARKETING to attract more players.
The economic group that plays slots is not the same group that bet on horses. It could be Horse tracks had the para mutual advantage for many years. But, when CASINOS came with River Boat Gambling, across the country, then the horse pool for betting went down. And, now CASINOS have learned 80% of their revenue is generated by those that play the one arm bandits.
During the last session it was Keenland and Churchill that did not want the CASINOS on their racetracks, but a seperate location. They did nto want to mix the BMW’s and the CADILLACs with the pick up trucks and older model cars. Now, the TRACKS say “BRING IT ON.”
If Kentucky ends up with only two race tracks Churchill and Keenland the horse people will still go to the tracks. And, with the elimination of the OTHER SUB STANDARD TRACKS just maybe, KEENLAND AND CHURCHILL will draw more fans.
This is not a problem created by consumers.
This is a problem created by expanded gambling across our nation. Now, when the race tracks were not able to compete, they want the government to BAIL THEM OUT.
Pardon, me . . . BUT . . .HAVE WE NOT SEEN ENOUGH, DANGEROUS, QUESTIONABLE BAIL OUTS BY OUR FEDS?
“I JUST WANNA SAY!”
JIM ANDERSON STIVERS
FRANKFORT, KY.
Jim Anderson Stivers | Jan 8, 2009 | Reply
I can’t remember the exact figure, but I think I recall that Keenland and Churchill will spend over one billion dollars to prepare for thousands of slot machines.
I wonder, how long it takes, with THE PROPOSED GAMBLING REVENUE, for these two tracks to amortize such a sizable debt. Then, they may have THE CASH.
Looks like GOVERNMENT BAIL OUT HAS SPREAD FROM WALL STREET . . . TO THE RACING INDUSTRY.
I VOTE.
NO!