02/23/2012 5:17PM

Kentucky casino bill fails in State Senate


LEXINGTON, Ky. - A bill that would have put a referendum on the November ballot asking voters to approve as many as seven casinos in Kentucky was forcefully dispatched in the state's Senate on Thursday, dashing hopes among the bill's supporters that casinos will be legalized anytime soon.

The State Senate voted 21-16 against the bill - well short of the 23 votes that were needed to pass it - after a two-hour skein of speeches from supporters and opponents. Unusually, the vote crossed party lines, an indication of the deep divisions that had been aroused by the issue and the dichotomy of the rural-urban divide in Kentucky.

The bill, which was supported by the state's Thoroughbred racing industry, was sponsored by Sen. Damon Thayer, a Republican, in partnership with the state's governor, Steve Beshear, a Democrat. In the past, Republicans have generally blocked efforts to approve casinos at racetracks, and Democrats have supported those efforts.

The defeat is a major blow to the racing lobby, which has pushed unsuccessfully for the legalization of racetrack casinos for 10 years but had thought the issue had its best chance yet this year. Under the parameters of the referendum, racetracks would have almost certainly received at least five of the casino licenses.

Supporters contended that legalization of casinos would have offered help to the state's racing industry, which claims that it is losing business to states where casinos subsidize purses, including neighboring states like West Virginia, Pennsylvania, and Indiana. Supporters also said that Kentuckians spent $450 million last year at out-of-state casinos, and they contended that the legalization of in-state casinos would help Kentucky retain those dollars while also creating jobs and raising revenue for government programs, which are facing deep cuts in the 2012 budget.

"If we don't get an infusion of revenue, we're going to continue to see this state go down and down and down," said Sen. Walt Blevins, a Democrat, who voted for the bill.

Opponents of the bill cited moral, economic, ethical, and personal issues in their speeches, along with the potential for casino money to corrupt Kentucky's politics, citing the infamous Boptrop scandal of the early 1990's, which ensnared more than a dozen Kentucky legislators in a racing-related bribery scandal.
In addition, opponents cited a thorny legal argument that the legislature would be in violation of the state's constitution if it approved a referendum proposing a constitutional amendment without first passing the amendment as a legislative body. The argument had gained steam over the past several weeks, and it appeared that if the legislature had approved the bill, then the act would have been challenged in court by groups opposed to the expansion of gambling.

"The constitution is clear on this," said Sen. Bob Leeper, an Independent, who voted against the bill.

Efforts to legalize expanded gambling in the past have focused on legislation that would have authorized casinos, but those efforts were unable to overcome Republican objections. The effort this year to approve a referendum asking voters to decide the issue was seen as a way to provide political cover to Republicans, who largely come from conservative districts in rural areas.