02/18/2010 12:00AM

Q & A: Damon Thayer, Kentucky State Senator, 17th District


When Kentucky State Senator Damon Thayer talks about the racing industry, he often uses the familiar "we," as in, "we need to talk with one voice." A former director of marketing for the Breeders' Cup who was first elected to the Kentucky Senate in 2002, Thayer has often held the racing industry's torch in Frankfort. But in the past several years, many people in the racing industry wish he would drop the "we," because they no longer consider him one of their own.

The reason: slot machines. Thayer, 42, a Republican who represents a deeply conservative district, has held firm to a campaign promise to oppose expanded gambling in Kentucky unless the expansion is authorized through a statewide referendum. By and large, the racing industry and its allies, mostly Democrats, have supported statutory authorization through legislation, and the result has been a stalemate, with the leadership of both parties accusing the other of standing in the way of the will of the people.

As an opponent of the industry's plan, Thayer has been the target of criticism from many members of the racing industry who accuse him of abandoning his roots. At horse sales and racetracks, where he was once greeted by extended hands, Thayer's presence now inspires sneers and whispers.

Thayer contends that his plan is the only politically viable option because of vows by anti-gambling groups to attack the constitutional foundations of a statutory authorization. As of mid-February, lobbyists were pessimistic that the issue would be resolved during an election year. In an interview with Daily Racing Form reporter Matt Hegarty on Feb. 16, Thayer said that there was still hope for a bill, provided the racing industry supports a constitutional amendment. Portions of the interview follow.

DRF: You continue to support a constitutional amendment to authorize slot machines, but the racing industry has balked at that prospect. Why is the racing industry opposed to a constitutional amendment?

Thayer: You'd have to ask [the Kentucky Equine Education Project, a racing industry lobbying group], because they're the ones who seem dug in on this. It's surprising, because it wasn't very long ago that they were spending a lot of time and resources promoting a constitutional amendment. From my view, the issue has made progress in the eyes of the public, and they shouldn't be afraid of a statewide referendum.

What changed their minds?

Apparently they got in cahoots with the governor, who also decided to flip-flop on the issue and promote slot machines by statute, which they saw as a quicker way to get slot machines at racetracks.

In response to your legislation calling for a constitutional amendment, Greg Stumbo, the Speaker of the House, said he would support legislation that would call for local votes in the counties with racetracks. KEEP has said it would support that, and it preserves a vote for the people. So is a compromise possible?

My opinion is that it's still not constitutional, and it also ignores public opinion that shows that 85 percent of Kentuckians want to vote on the matter. It's also not any different from the bill they offered last year in the special session, which was slots-by-statute with a local government body option. This changes it to slots-by-statute with a local government vote by the people in communities in which there are racetracks. That's only seven counties, and it's insulting to the people who live in the other 113 counties that, after years and years and years of public debate on this issue, they'd be left out of the vote.

What would it take for you to compromise?

There are two principles that, for me, I will not compromise on. One, it has to be a statewide constitutional amendment, and number two, it must protect the horse industry. By that I mean, the amount of money going into purses and breeding incentives must be in the constitution so the fund can't be raided by a future General Assembly, like we've seen in other states, like West Virginia and Pennsylvania, for example. We saw it last year in Fort Erie - the gaming company wanted to shoot down the races and continue to run slot machines. As a matter of fact, Harrah's just offered $70 million to shut down the dog tracks in Iowa but keep the casinos.

It makes one wonder, is horse racing next? So I think it's important, I think it's critical, that these protections for the horse racing industry be inscribed in the constitution.

It's always interesting to hear you talk about protecting the horse industry, because a lot of people in the racing industry here in Kentucky say that you are doing just the opposite, that you've turned your back on the industry that supported you on your way up. How have those accusations affected you?

I still have a lot of friends in the industry who are quietly supportive of my efforts. It's important to remember, from day one, when I announced my candidacy in 2002, that I said I was for a constitutional amendment. There should be no surprise that this is the way I am moving things forward. I do not believe that slots by statute is constitutional.

It has been disappointing, because I've supported the industry and taken point on a number of issues that affected the industry. I authored the breeders' incentives bill and persuaded former Gov. Fletcher [a Republican] to put it in his tax reform plan, and then lobbied to make sure it stayed in the plan. A few years ago, Jess Jackson - who I know and respect - and I disagreed with his position on regulating the sales industry, and I stood with the horse industry, which led to the passage of a reasonable dual-agency bill without bringing government regulation into the sales arena. I was the one that made sure that bill got through.

So it's been disappointing. The last significant communication I had with an influential member of the KEEP board, the board member said, and I quote, "The fact that you use that as a defense, your minor accomplishments for the horse industry, is laughable." So I've gone from being someone who has done nothing but help the horse industry to being insulted for my efforts.

The slots issue has shifted the allegiances on the entire Kentucky political landscape, with lifelong supporters of the Republican Party from the racing community now providing money and support to the Democratic Party because of its embrace of the industry's cause. How has racing's shift altered politics in the state, if at all?

[The racing industry has] made it partisan, because there are Democrats who are opposed to slots and Republicans who are in favor of it. They've thrown in with Gov. Beshear [a Democrat], who has become a one-issue governor, and KEEP and its allies are complicit in that effort. Everyone thought by now that the Democrats would have control of the Senate, but a funny thing happened, the voters spoke, and the voters spoke loudly in the special election in September that they didn't want that to happen.

[In the special election, a Democratic candidate backed by the racing industry lost to the Republican candidate, solidifying the Republicans' majority in the Senate.]

KEEP finds itself on the wrong side of a shifting political tide. It's going to be a very good Republican year in Kentucky. In the short term, the fact that they took aim at our Republican Senate majority actually made us stronger and made Senate President David Williams stronger as well. Based on election results here in Kentucky, as well as Virginia, New Jersey, and Massachusetts, as well as the results of all national polling, everyone can see that this is going to be a very Republican year, and we're very likely to pick up seats in the Senate in November.

Given that this is an election year, how has that influenced the willingness of legislators to take up slots?

The Speaker of the House [Democrat Greg Stumbo] has pretty much declared slots dead, and I think, because it's an election year, many of those who voted for slots in the House last year either have opponents in the May primary or the general election or both, and they're pretty reluctant to take another vote on slots.

The most politically palatable way to move the issue forward is to move the issue forward on a constitutional amendment. But they don't seem to want to engage in the conversation except to take potshots at my legislation, as well as to question my motives and my intent. That's pretty amazing considering the long list of accomplishments I have in the horse industry.

In fact, it's been remarkable to watch the horse industry leaders turn on me. It reminds me of that Oscar Wilde quote, "A friend will stab you in the front." If anything, it's made me stronger. Certainly, the people of my district are very pleased that I kept my campaign promise to support a constitutional amendment, and many are impressed that I stood up to the horse industry under tremendous political pressure.

There's no question that racing in Kentucky is suffering. There's no question that racing nationally is suffering. What can be done to address those problems? Is there another way other than slot machines?

There is, but it's going to take time. What we're seeing in the racing industry is years and years of either bad decisions or no decisions to help make horse racing more popular. When the economy slipped into recession, the racing industry was ill prepared to deal with it because we weren't in a position of strength.

I was there for the courtship, the marriage, and the divorce of the [National Thoroughbred Racing Association] and the Breeders' Cup, and it was a spectacular failure of an industry to take advantage of momentum to make racing a more nationally viable sport. We were headed in the right direction, in terms of a national TV strategy, a national sponsorship strategy, a national marketing strategy. We were taking advantage of the Internet. We were moving the needle in terms of the popularity polls of horse racing. Then that all fell apart, and we're back to where we were with these fractured fragments of our industry infighting, fighting amongst ourselves, and we're not moving forward at all. The NTRA is underfunded in terms of its initial marketing strategy. The Breeders' Cup is going off and doing its own thing. We're not speaking with one voice. . . . I also think we have too many racing days. It's pretty obvious that we have an overproduction of racehorses. The entire supply-and-demand model is out of whack. We have more horses than there is a demand for at the sales. We have more races than there is a demand for from the betting public. All of these issues need to be addressed, and the fact that the downturn is being blamed on the lack of slots in Kentucky, that's a specious argument, in my view.

Is there anything on the short-term horizon that could provide the racing industry with revenue other than slot machines? Is anything politically viable that could provide help?

We've spent a lot of time, Senate leaders and our staff, over the last eight to 10 months, looking at all the options of where we could raise money that we could put into purses and breeder incentives. The Senate had a bill that passed last June that the House, the governor, and the racing industry failed to support. And frankly, we're not coming up with anything in terms of being able to raise money. We continue to look at every viable option, and I'm hopeful that maybe we'll stumble on to something. But it doesn't appear as if there is anything on the horizon that could work.

I will tell you that the elevation of the horse industry's argument that it needs help has brought derisive comments from many other industries who believe that the horse industry needs to figure out a way to stand on its own two feet. I had a restaurant owner in my district call me up and say, "Hey, can you get me four of those slot machines? Because they'd really help my business." We recently had a [agriculture] committee hearing in which we learned that, 10 years ago, Kentucky had 2,000 dairy farms. Now we have only 1,000. The garment industry has left Kentucky. We have a fairly strong automotive industry in Kentucky that is feeling the pain of this economy. The bourbon industry is looking for tax breaks. The coal industry is an industry we want to continue to support.

In the halls of Frankfort, there are those who say, "We all need to figure out ways to survive in this economy." People want the horse industry to survive, but there are a lot of people out there that don't believe that they should have a monopoly on slot machines and gaming. There are very compelling arguments out there that say that the best way forward for casinos is to put freestanding casinos in the larger population centers in Kentucky, and to put a portion of those proceeds into supporting purses and breeder incentives. Those people argue that slot machines at racetracks can't compete with full-blown casinos in Indiana and Ohio, for example. I'm not saying I support that. I'm just telling you what is being said out there in the marketplace of ideas.

The fact remains that the only politically viable approach is a constitutional amendment. Eighty-five percent of the people in Kentucky say they support that. Only 13 percent favor a statutory solution. And I'm certain that there are horsemen out there who will understand that the best solution is to let the people vote.