03/16/2010 11:00PM

Kentucky gambling expansion stalled

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A bill that would legalize electronic gambling machines at Kentucky racetracks stalled in a state Senate committee on Wednesday and may be headed for the dustbin.

The Senate Committee on State and Local Government declined to take action on the bill at the request of its chief sponsor, Damon Thayer, according to reports. The same committee had voted to support the bill last week, but the legislation was sent back to the committee on Wednesday because of indications from Senate President David Williams that the full Senate would not pass the bill without major changes.

Thayer did not immediately return phone calls on Wednesday afternoon.

According to reports, groups opposed to expanded gambling had indicated over the past several days that they were uncomfortable with the measure. Thayer, a Republican, is a former marketing executive of the Breeders' Cup with numerous ties to racing. He represents a deeply conservative district.

The legislation would have authorized Instant Racing machines at Kentucky racetracks. The machines, which were developed by officials of Oaklawn Park and the bet-processing company AmTote, use horse races run in the past to generate numbers that determine payouts to bettors. The bill would have required racetracks to pay out at least 81.5 percent of the money bet and set aside 1.5 percent of the handle for purses. Racetracks would have kept the remainder.

Williams, a Republican, said on Tuesday that he wanted to amend the bill so that it set aside statutory authorization for the machines in favor of authorization from the state's racing commission and its Democratic governor, Steve Beshear. The amendment would have provided a thin veil of political cover to Senate Republicans if they voted for the amended measure because a vote in support of the legislation would not have directly led to authorization of the machines.

Earlier this year, Kentucky Attorney General Jack Conway issued an opinion that said that Instant Racing machines could be authorized by the racing commission under an interpretation that the machines offer "games of skill." That interpretation is scoffed at by expanded-gambling opponents, who would have likely filed lawsuits challenging the authorization if the games were legalized.

Similar challenges have succeeded in two states, Wyoming and Maryland. Kentucky's constitution prohibits wagering on any games of chance other than the lottery.

The bill would have also added a 1.5 percent tax to bets made by Kentucky residents on Kentucky races through account-wagering companies. The tax would have either increased the cost of business for account-wagering companies that took wagers from Kentucky residents or been passed on to bettors.