By Janet Patton – email@example.com
A Senate committee for the first time approved a proposal Thursday to expand gambling at racetracks, a move that could put millions into Kentucky horse racing purses.
The bill, which is expected to clear the Senate with bipartisan support next week, would allow all eight existing racetracks to add electronic gambling commonly known as “Instant Racing,” which pools bets on random previously run races.
Sen. Damon Thayer, R-Georgetown, who filed the legislation, said it is designed to shore up the state’s struggling industry but it won’t generate any new revenue for the state’s General Fund.
“I do think it will provide some help and a great deal of hope for the horse industry,” Thayer said.
Senate President David Williams, R-Burkesville, said the proposal, which was added to a racing-related bill that passed the House last month, could come up for a vote in the Senate as early as Tuesday.
“I think it has considerable support. Bipartisan support,” Williams said.
At least 81.5 percent of all the money wagered on Instant Racing would go back to bettors in the form of winnings. Of the remainder, 1.5 percent would go into the existing Kentucky Thoroughbred Development Fund or Kentucky Standardbred Development Fund for purse supplements.
Thayer said income projections are difficult because Oaklawn Park, the Arkansas Thoroughbred track that pioneered Instant Racing, operates on a different scale from Kentucky’s multi-track, multi-breed racing scene. At Oaklawn, a 1 percent tax generated more than $1.9 million for purses in 2009.
“It this passes and is enacted fully, it could double the amount of money” in the thoroughbred fund, Thayer said. “That could be enough to convince people to race and breed in Kentucky.”
The fund currently pays out $5 million to $6 million a year in purse supplements for Kentucky-bred horses. Those supplements make Kentucky horses more valuable, helping both breeders and owners, Thayer said.
The rest of the revenue from Instant Racing would be divided between the racetracks and horsemen.
The bill also puts a 1.5 percent tax on bets made through advance-deposit wagering platforms such as Churchill Downs’ Twinspires.com. And the legislation would establish a permanent pari-mutuel tax rate of 1.5 percent for all tracks, rather than the existing two-tiered system that makes tracks with more on-track betting pay more taxes.
“It’s a step. It’s something,” said David Switzer, executive director of the Kentucky Thoroughbred Association.
Previously, the horse industry has expressed little support for pursuing Instant Racing, even though an opinion by Attorney General Jack Conway in January said it could be legalized with regulatory changes. Tracks and horse breeders have lobbied instead for slot machines, which they say are needed to compete with other states that have expanded gambling.
Keeneland spokesman Jay Blanton said late Thursday that the track hasn’t had time to fully review Thayer’s proposal.
“However, we are encouraged that thoughtful proposals are being put on the table with the goal of assisting Kentucky’s signature industry,” Blanton said in a statement. “We look forward to engaging in discussions going forward in any way that is productive.”
Democratic Gov. Steve Beshear also issued a mildly-positive statement about the proposal.
“Although this measure does very little to plug the gaping revenue shortfall in our state budget, it is an acknowledgement from the Senate majority that the crisis facing our signature horse racing industry is indeed real,” Beshear said. “Instant racing would be a small step on behalf of our struggling racing industry, but every little bit helps.”
Senate Minority Floor Leader Ed Worley, D-Richmond, said Instant Racing is a compromise that could become law, while slots could not.
“I think House Democrats and House Republicans and Senate Democrats and Senate Republicans recognize that the horse industry needs some help and this is a good first initiative,” Worley said
Both Worley and Thayer denied that Instant Racing-type games are not a first step toward video slots.
“Instant Racing is different,” Thayer said, although the machines look similar. “It’s an attempt to attract people to horse racing who like that product.”
Rep. Harry Moberly, D-Richmond, also filed a bill earlier this month to allow Instant Racing but with a different taxing structure. That legislation also would authorize electronic “games of skill” such as video poker and video blackjack, which Thayer’s bill would not allow.