Bill establishing new regulatory body in Kentucky goes to Gov. Beshear

The Kentucky House passed a bill late on Thursday that would abolish the Kentucky Horse Racing Commission and pass its duties on to a newly formed state corporation that would regulate all forms of gambling in the state other than the lottery.

The bill passed in the Senate on Tuesday and has been sent to Gov. Andy Beshear, who has not yet given an indication of whether he will sign the bill. The legislation was supported by Republicans, who have a veto-proof majority in both chambers of the legislature.

The bill would set up the Kentucky Horse Racing and Gaming Commission as of July 1. The new commission would be a public corporation, with a board of directors and staff, akin to the Kentucky Lottery Corporation, which was created by the legislature in 1989. Under the bill, the current executive director of the commission, Jamie Eads, would serve as the president of the corporation for two years.

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The bill’s chief supporter and sponsor was Damon Thayer, the Senate Majority Leader, who has strong horse racing ties. Thayer announced earlier this year that he will not run for re-election after his current term expires at the end of 2024, after 22 years in the Senate.

The duties of the Kentucky Horse Racing Commission have expanded over the last decade due to the growth of historical horse racing, a legal form of betting in Kentucky that uses the results of previous horse races to generate random numbers for betting devices that operate much like slot machines. Under Kentucky law, only racetrack licensees can operate the machines, which have generated hundreds of millions of dollars in revenue for the tracks and led to a doubling of purses on the Kentucky circuit.

At the same time, the advent of the Horseracing Integrity and Safety Authority, a private company created by federal law in 2020 to regulate racing in states across the U.S., has cut into the KHRC’s responsibilities to regulate racing in the state.

The KHRC is a cabinet agency, and its commissioners are appointed by the governor. Under the new structure, the board members would continue to be appointed by the governor, but they would need to be approved by the Senate. The Executive Branch Ethics Commission would have oversight duties of the corporation.

The corporation would oversee horse racing, sports betting, historical horse racing, and charitable gaming.

“As a cornerstone of Kentucky’s heritage and economy, it’s imperative that we uphold strong oversight and management of these vital industries,” said Thayer, in a statement. “I contend the success of this industry demands it be a stand-alone entity capable of utilizing its funding without having to get authorizations from a bureaucratic agency.”

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