Kentucky HHR bill moves out of committee for vote in the House

LEXINGTON, Ky. – A Kentucky House committee on Wednesday morning overwhelmingly approved a bill sanctioning a type of gambling device currently in use at a number of racetracks, setting the stage for a final vote on the House floor.

The House Licensing and Occupations Committee approved the bill on a voice vote Wednesday morning, just 15 hours after the full state Senate approved the bill on a vote of 22-15, with one abstention. The House committee’s chairman, Rep. Adam Koenig, a Republican representing counties in Northern Kentucky, was on the record prior to the hearing as being in support of the bill.

Testimony during the committee hearing was largely a re-run of a committee hearing held in the Senate last week. Testimony in support of the bill, which changes the definition of pari-mutuel wagering to allow for the operation of the devices, was provided in part by Sen. John Schickel, who successfully shepherded the bill through the Senate.

Tom Drury, a Kentucky-based trainer, testified that the devices, called historical horse racing machines, have allowed him to maintain a sizeable operation during the winter in Kentucky due to subsidies from the machines flowing to purses and breeders. Those subsidies have made purses in Kentucky competitive with other subsidized tracks in neighboring states, Drury said.

“For the first time in a long time we as horsemen felt like the playing field was beginning to level up a bit, that we were able to compete with the rest of the country as far as income goes,” Drury said.

Testimony in opposition to the bill was provided by three representatives of the Family Foundation of Kentucky, a conservative religious group whose legal filings led to a State Supreme Court ruling in September of last year that said a type of device in use at some tracks did not meet the state’s definition of pari-mutuel wagering. The Family Foundation representatives continued to maintain that the bill was unconstitutional, and they described the devices as a “bailout” for “wealthy gambling companies.”

“Subsidizing this wealthy industry is not proper public policy,” said Stan Cave, legal counsel for the group.

While the bill appeared to pass out of the committee unanimously, the fate of the bill on the House floor is considered an open question by both supporters and opponents. Republicans have a supermajority in the House, as they do in the Senate, and many of those representatives have constituents who are uncomfortable with gambling.

Rep. Al Gentry, a Democrat representing parts of Jefferson County, home of Churchill Downs, said during the hearing that he has been “working really hard to pave the way for this bill” on the House floor, and he defended the position that the legislative effort to re-define pari-mutuel wagering to allow for the operation of the devices fit within the Supreme Court’s mandate.

“It’s not about what a machine looks like, it’s how a machine operates,” Gentry said.

Bill Lear, the legal counsel and a trustee at Keeneland Association, said that the bill’s reworking of the definition of pari-mutuel wagering laid a firm foundation for the operation of the devices without a constitutional amendment, as some have argued.

“It is consistent with the classic principles of pari-mutuel wagering, in that you are not betting against the house,” Lear said.

Rep. Matthew Koch, a Republican who represents several central Kentucky districts, said that the devices have led to a 102 percent increase in purses at tracks in Kentucky over the past eight years, providing a “shot in the arm” to the racing industry.

“This is about protecting our Kentucky farm families,” Koch said.

But Rep. Jerry Miller, a Republican representing a rural district in northern Kentucky, cautioned that many on the House floor will have constitutional reservations about the bill.

“I wish we were voting on a constitutional amendment, rather than a legislative fix that may or may not hold up in court,” Miller said, as he voted for the bill. “As I’ve told my many friends, I reserve my right to change my vote on the House floor.”