By Patrick Crowley
The Cincinnati Enquirer

COVINGTON - Just a few months ago, two of Northern Kentucky's top developers, Jerry Carroll and Bill Butler, were discussing a joint venture in making a push in Frankfort for legalized casino gambling.

But with Mr. Butler's release of his own plan for pursuing a casino and keeping a sizable portion of gambling revenues in Northern Kentucky, the proposed high-powered partnership may be over before it ever really got going.

Mr. Carroll said Saturday that Mr. Butler's plan to allocate a third of gaming revenues to local governments and social services in Boone, Kenton and Campbell counties will never win approval from state legislators.

"The thought is good but it's not reality," Mr. Carroll said in an interview. "The decisions over how the money will be spent will be made in Frankfort, not Covington.

"The whole idea with gambling is to plug some big holes in the state budget," Mr. Carroll said. "Any plan that does not address that issue is futile and naÔve."

Legislators, faced with an $800 million revenue shortfall in the state budget, are expected to consider a bill legalizing casino gambling when they meet in Frankfort in January.

Mr. Carroll, who has been pushing for legalized casino gambling in Kentucky for a decade, said Mr. Butler is taking the wrong approach and called him a "new kid on the block ... who is floating an idea that is never going to happen."

Mr. Butler could not be reached for comment Saturday. He has discussed some aspects of the plan with Mr. Carroll, who plans to continue lobbying lawmakers with his own ideas for how gambling should be structured in Kentucky.

According to Mr. Carroll, the plan pushed by Mr. Butler calls for construction of a casino in Northern Kentucky, possibly on a tract of open riverfront property between Covington landing and the Clay Wade Bailey Bridge, known as Riverfront West.

This summer Mr. Carroll and Mr. Butler discussed developing the property into a casino if a gaming bill was passed by the legislature.

Under Mr. Butler's plan, one-third of money generated by a casino would be used by governments in Campbell, Kenton and Boone counties to fund social services and economic development programs.

A glaring omission in the plan is Kentucky's thoroughbred racing industry, Mr. Carroll said.

Kentucky's racing industry and thoroughbred racetracks, including Turfway Park in Florence, pushed legislation last year that would have allowed casinos to be built at the tracks. The bill died without being called for a vote, but the horse industry is expected to revive the bill in the 2003 session.

The industry has said it needs gambling to compete with riverboat casinos in Indiana and Illinois and racetrack casinos in West Virginia and other states.

The Ohio General Assembly is also considering allowing racetracks such as River Downs and Lebanon Raceway to operate video gambling devices that offer blackjack, slots and other games.

Mr. Carroll said he believes the best way for Kentucky to compete with gaming in other states is through full-blown, freestanding casinos not necessarily tied to racetracks.

But he added that any legislation dealing with gambling must address the racing industry, possibly by allocating a portion of the money generated by gambling to the horse industry.

"The horse industry must not be forgotten in all of this," said Mr. Carroll, the former owner of Turfway Park and now president of the Kentucky Speedway in Gallatin County.

Turfway Park President Bob Elliston said Saturday he has not seen Mr. Butler's plan or talked about it with him. But if it does not address the needs of the horse industry, the tracks would work to kill the plan in Frankfort.

"We would not have any choice," Mr. Elliston said. "The last thing we need is more competition. If there is going to be gambling, a big chunk has to go to the thoroughbred racing industry."

Kentucky House Majority Caucus Chairman Jim Callahan, D-Wilder, sponsored the legislation legalizing gambling in the 2002 session and said Saturday he is likely to do the same next year.

And while he is not sure what form the bill will take - be it freestanding casinos or video gaming at tracks - earmarking a third of the money for Northern Kentucky will never sell in Frankfort, Mr. Callahan said Saturday.

"You need statewide support for something like this, and while I would do as much as I can for local government we have a shortfall in the state budget that needs to be addressed," Mr. Callahan said.

State Rep. Jon Draud, R-Crestview Hills, a proponent of legalized gambling, said he likes Mr. Butler's idea of keeping some of the money in the region.

"I don't like leaving the horse industry out, and any gambling bill is going to have to be supported by the industry or it's probably not going to pass," Mr. Draud said.

"I like seeing some of the money go to social services and some it to the local governments in the area. But I also think that is going to be a hard sell politically," he said.

E-mail pcrowley@enquirer.com.