FRANKFORT - The state's continuing budget problems will likely prompt a review of the revenue picture and Gov. Paul Patton said Monday it will include a fresh look at expanded gambling.

        Mr. Patton said expanded gambling is “probably preferable” to a tax increase as a revenue source or to cutting state services.

        Mr. Patton, though, said he wants to look at the General Fund receipts through September, the end of the first quarter of the fiscal year, before making any decisions about how to proceed.

        The Rev. Nancy Jo Kemper, executive director of the Kentucky Council of Churches and a leading gambling opponent, said she has long suspected that the revenue shortfalls would be seized as a tool to promote casino-style gambling.

        “It will not fix Kentucky's financial problems,” the Rev. Ms. Kemper said.

        She pointed to the experience in Indiana, which has slowly expanded gambling opportunities and still finds itself in financial difficulties.

        Kentucky's revenue shortfall in the fiscal year that ended June 30 ran to nearly $700 million and drained its rainy day fund. Even though there is no legislatively enacted budget, Mr. Patton's spending plan counts on revenue growth this year.

        “The state may very well have to face some choices as to whether it wants revenue or it wants to cut services,” Mr. Patton said.

        His comments, coincidentally, came after a ceremony to mark efforts against problem and compulsive gambling. The ceremony drew representatives of Kentucky racetracks, which lost their bid earlier this year to have the General Assembly approve slot machines at tracks.

        The tracks have produced some studies that project annual income of $300 million from slot machines at eight licensed facilities, though some have questioned the figures.

        Though the legislation that stalled this year would have restricted the slot machines to racetracks, others argue that full-fledged casinos scattered strategically around the state would mean far more revenue and not give an exclusive franchise to the tracks.

        Keeneland Association president Nick Nicholson said the racing industry has a “strong, strong, strong preference” to have casino-style gambling limited to racetracks.

        Mr. Nicholson said the tracks could be up and running as slot palaces far more quickly than full-fledged casinos and could have tax money in state hands within “months, not years.”

        If there is a discussion about state revenues, it would likely include at least some overhaul of the tax code, which has been blamed for some of the flagging revenues.

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