06/17/2009 11:00PM

Ky. House committee passes slots legislation

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The Kentucky House Appropriations and Revenue Committee passed a bill authorizing slot machines at Kentucky racetracks at a hearing Thursday, sending the bill to the House floor for a vote.

The bill, which passed 18-9 with one abstention, would allow all seven racetracks in Kentucky to operate slot machines, although Keeneland and the Red Mile in Lexington would share a license. The legislation has been pressed by the state's Democrats, who control the House, but Senate Republicans remain largely opposed to the bill.

The bill that passed Thursday was introduced by Rep. Greg Stumbo, the speaker of the house. It differs in several ways to legislation that was initially released by Gov. Steve Beshear, a Democrat. Licensing fees in Beshear's legislation totaled $360 million, payable over two years; those fees now total $510 million, payable over five years. The fees would be paid by racetracks and would give them the right to operate slot machines for 10 years.

In addition, the amount of money that the state would keep from slot machines is now 28 percent in the first five years of operation, rising to 38 percent after that period. Beshear's legislation granted the state 25 percent in the first five years, and 35 percent after that period.

The bill also devotes hundreds of millions of dollars to school construction from slots proceeds. Republicans have criticized the earmark as "vote buying" and complained that a legislator who casts a vote against the bill will face complaints that he or she is opposed to building schools.

Beshear has estimated that slot machines will generate $800 million in revenues during their first full year of operation. Kentucky's racetracks have been lobbying aggressively for the bill, and a lobbying organization, Kentucky Equine Education Project, has been spearheading a massive public-relations campaign over the past several months to drum up support.

The Kentucky legislature is currently in special session to address a projected $1 billion budget deficit for the fiscal year beginning July 1. The legislature is expected to stay in session for no more than two weeks. It was unclear Thursday afternoon when the full House would vote on the slots bill.

A bill addressing the budget has not yet been introduced. Democrats have said they want a vote on the slots bill prior to passing budget legislation, so that the state can anticipate whether slot machine licensing fees can be factored into the budget for next year.