Wednesday, February 17, 1999
Ky. assembly could let Turfway add casino
BY PATRICK CROWLEY
The Cincinnati Enquirer
FLORENCE — Kentucky lottery officials have determined how casino-style gambling can be brought to thoroughbred racetracks without voter approval.
Up to now, lawmakers have said voters needed to decide the issue through a constitutional amendment. The issue was thrust into the spotlight by the pending sale of Turfway Park to a partnership among a racetrack, a casino operator and a provider of online lottery games.
The lottery commission, suffering lagging sales in counties near riverboat casinos, asked its lawyers to investigate how the law could be changed. The attorneys said lawmakers would need only to amend what the lottery law allows.
“We're not waving the flag to change the legislation,” said Kentucky Lottery spokesman Rick Redman. “But our legal counsel has reviewed the statute and it's our belief the change could be made by just changing the legislation.”
But it's uncertain if there would be support in the legislature to allow gambling, including slot machines, at tracks.
“It would be very difficult to do anything involving gambling short of having the people say if it will be allowed,” said House Majority Caucus Chairman Jim Callahan, D-Wilder.
Several leading state lawmakers, as well as Gov. Paul Patton, have said the legislature and the voters should decide the issue through a change in the state constitution.
A constitutional amendment would have to first be approved with 60 votes in the 100-member House and 23 in the Senate, which has 38 members.
Just changing the lottery law to allow gambling is “a bad idea,” said Sen. Tim Shaughnessy, D-Louisville. “I don't see any way the legislature will touch this.”
Still, the option of simply changing an existing law rather than trying the more politically difficult paths of passing new legislation or asking voters statewide for approval brings a new wrinkle to a complicated issue.
“There is no easy sell,” Mr. Shaughnessy said.
State lawmakers are expecting the new owners of Turfway Park to ultimately seek approval to install video lottery termi nals (VLTs), a type of video slot machine, at thoroughbred tracks.
The General Assembly convenes for its next regular legislative session in January.
“What I think is going to happen in the next two or four or six years is a big push for (video slot machines) at the racetracks,” House Speaker Pro Tem Larry Clark, D-Louisville, said last week during a legislative hearing on the sale.
Last month a partnership among Keeneland racetrack in Lexington and subsidiaries of Harrah's Entertainment, one of the world's largest casino operators, and GTECH, a provider of online lottery games in several states including Kentucky, agreed to buy Turfway Park for $37 million in a sale expected to close in March.
The new owners aren't pushing for gambling at tracks, but they won't rule out such an effort in the future as a way to combat competition from the growing fleet of casino riverboats operating on the Indiana shore of the Ohio River.
Over the last three years four boats have opened from Lawrenceburg to Evansville. All are raking in millions of dollars a month.
The Kentucky Lottery is suffering, with sales down in the counties closest to the riverboats, said Mr. Redman.
In January the overall sale of instant lottery tickets was off 22 percent from a year ago, while overall lottery sales declined 8.1 percent, Mr. Redman said.
“We are being impacted by the riverboat casinos, without question,” Mr. Redman said. “If Frankfort wants to receive the level of revenue the lottery generates, or more, then we need the means to compete.”
If the lottery could run casino games at tracks, not only would more revenue go to the state, but other forms of gambling, like Keno, could be added at the tracks along with VLTs, Mr. Redman said.
The lottery generated $12 million for the state in January. That goes into the general fund. But through legislation passed in 1998, millions of dollars in lottery money go to college scholarships for Kentucky high school students, literacy development and early reading programs.
This year the education money will total $14 million, but next year, when the program is fully implemented, the total will be $24 million.
But Keeneland Chairman Ted Bassett, who wants the voters to decide the gambling issue, argues that allowing the lottery to run casino-style games at racetracks would expand gambling outside the thoroughbred industry.
“Everybody who sells lottery tickets is going to want to have gambling,” Mr. Bassett said.
The lottery also would cut into the money the tracks would receive from gambling, he said.
“We see (gambling) as something that could enhance the industry of thoroughbred racing and breeding ... and something that would help the industry compete” against the riverboats, Mr. Bassett said.
“But we don't want to see its proliferation into non-parimutuel operations.”
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