02/24/2012 3:38PM

Kentucky casino effort seen as done for the year


LEXINGTON – The straight-up defeat on Thursday of a bill sought by the Kentucky racing industry that would have potentially allowed state racetracks to operate casinos has effectively killed the effort for the rest of the year, officials involved in lobbying for the bill acknowledged on Friday.

The defeat was a major setback for the industry, which had considered the 2012 legislative session its best shot in a decade for moving the issue forward. The result was all the more stunning considering the racing industry’s generally solid image in the state compared with the vitriol that was directed at the effort by its opponents, some of whom characterized the bill as a blatant money-grab on behalf of a rich industry seeking a state-sanctioned monopoly on casinos.

Officials who had lobbied for the bill said on Friday that no serious effort will be made this year to resurrect any legislation that would ask legislators or voters to approve casinos. Instead, racing lobbyists said that they would retrench, in the hopes of pressing for bills that might provide economic relief to an industry that they contend is suffering because of competition from racetracks with casinos in neighboring states.

“I don’t know what could happen that would change the sentiments” of the casino bill’s opponents, said Patrick Neely, the executive director of the Kentucky Equine Education Project, a lobbying group funded by the racing industry. “We’ve got to regroup for now, and look for measures that would address the competitive disadvantages we’re facing.”

The Senate, which is controlled by Republicans, voted 21-16 against the bill, seven votes short of what it needed to pass, with several senators crossing party lines to vote for or against the bill. Opposition was orchestrated by Senate President David Williams, a staunch opponent of expanded gambling who was soundly defeated in last year’s gubernatorial election against incumbent Steve Beshear, a Democrat who supported the bill.

While the official tally was enormously discouraging to supporters, the actual count in support of the bill going into the Wednesday vote was higher, according to legislative sources who spoke on the condition of anonymity. Because it takes two legislators who voted against a bill to petition for a bill’s reintroduction during the same session, two Democrats who supported the measure but were aware the bill would not pass voted against it at the last minute to protect “the very slim chance” that the bill could be reintroduced, one source said.

The defeat may also have enormous ramifications for Sen. Damon Thayer, the Republican who sponsored the bill. Thayer, who worked at Turfway Park early in his career, has opposed legislative efforts to pass expanded gambling in the past, but he went against his party in supporting the bill, saying that the public should have an opportunity to vote on the issue.

As a result, Thayer said that he cannot spearhead any additional measures advocating expanded gambling in the near future.

“That was a pretty tough vote yesterday,” Thayer said. “It’s caused a lot of problems with my caucus. But I felt strongly about the bill. It’s long overdue to let the people decide.”

The defeat may also expand efforts by state tracks to seek licenses for Instant Racing machines, which were approved under the state’s parimutuel regulations in 2010. Since the approval, two tracks, Kentucky Downs and Ellis Park, have been granted approval to operate the devices, which use the result of previously run races to generate random numbers to determine payouts. Preliminary results from devices installed at Kentucky Downs near the border with Tennessee – where all forms of gambling except the lottery are illegal – have been running above projections.

Kevin Flanery, the president of Churchill Downs, said on Friday that the company is still examining whether to install the devices, which are expected to be far less popular in the Louisville market, where casinos are operating just across the river in Indiana. But any decision on applying for the devices will have to wait until a challenge of the legality of the machines is heard in April, Flanery said. Churchill has filed a brief arguing in support of the devices.

Meanwhile, Flanery said that Churchill remains committed to lobbying for casinos at tracks, contending that nothing less is acceptable.

“If you’re going to have a level playing field, you have to have the same tools that other states have,” Flanery said. “You can’t fill a six-foot hole with two feet of dirt.”