Gambling Bill Introduced to the Kentucky State Legislature

Kentucky Racetrack Casinos - Expanded Gambling Kentucky

The pension expenditures could hit $5.4 billion over the next two years.

A pair of Kentucky state representatives introduced a gambling bill which would approve land-based casinos and expand the lottery. Rep. Dennis Keene (D-Wilder) and Rep. Rick Rand (D-Bedford) introduced the bill to the Kentucky House of Representatives.

Under the new legislation, the Kentucky Lottery Corporation would oversee and administer both forms of expanded gambling. Keene and Rand want four free-standing brick-and-mortar casinos that would have electronic gaming machines, but not full casino gaming in the form of poker or table games.

License applicants would be restricted to Kentucky horse racing tracks licensed already for pari-mutuel wagering. Churchill Downs in Louisville has sought slot machine gambling for some time, so the bill likely would have the support of the state’s most famous horse track.

$500 Million in Revenues

Rick Rand predicted that expanded gambling could generate as much as $500 million in tax revenues of the biennium. Rep. Rand described how the financing would work: “Based upon actuarial assumptions, and looking at revenue generated from our neighboring states, this could be a windfall for Kentucky. Initial license fees for casinos would generate one-time $325 million in fees followed by $236 million annually. That would be a great step in the right direction towards decreasing our pension shortfall.”

The longtime Kentucky lawmaker noted that the pension crisis is not simply a matter of economics. The failure to assure the solvency of Kentucky’s pension fund is leading to a dropoff in essential services, including the public education system and police work in Kentucky’s communities.

Slot Machines to Help Fund Pensioners

Rand, who has served in the Kentucky House for 14 years, said, “The uncertainty in the pension system at this time is leading to a mass exodus of experienced teachers, state police officers and state and county workers who will flood the retirement system. Do voters want to allow the new revenue from expanding gaming to build the pension fund or would they rather have cuts made on the backs of the state’s over 100,000 retirees? It’s time to put the gaming issue on the ballot so the public can have their say on this issue.”

Dennis Keene, head of the House Democratic Caucus, said the gaming revenues would go to help the state pension crisis. At present, Kentucky’s lawmakers are at an impasse with Gov. Matt Bevin, who said he will not raise taxes to pay for pensioner benefits.

The two Democrats are seeking a third way by tapping into the gambling industry. Rep. Keene says expanded gambling is sustainable and renewable income, which is what the state needs at the moment.

Keene Noted Out-of-State Casinos

In comments after he introduced the legislation, Rep. Keene said, “Casinos are already located along all of Kentucky’s borders and those states are reaping the benefits of additional tax revenues. Kentucky’s lottery gambling is highly successful and by expanding existing gaming venues to allow for casino-type games, we will grow a new revenue source to help us catch up on the pension shortfall.”

Five of the seven adjacent states to Kentucky have land-based gambling. Though Kentucky’s state legislature consisently has blocked brick-and-mortar casino gambling due to concerns about problem gambling and social concerns, Kentuckians in every direction have short drives to visit a casino out-of-state. Cincinnati’s Jack Casino receives a big boost from Louisville-area gamblers — and all of that money flows out of state.

No Cuts to Retirees’ Benefits

Keene, who has served as the 67th District representative since 2005, added, “Before we look at a plan that involves cuts to retirees’ benefits, we have opportunities to being new revenue that will be designated to the pension fund.”

Despite the reasoning of the two state representatives and the pending need for solutions to the continuing pension crisis, the expanded gambling bill by Keene and Rand faces an uphill struggle to gain support. Kentucky’s House of Representatives has a 64-36 split in favor of the Republican Party, while Kentucky’s Senate has a 27-11 division in favor of the GOP. Governor Matt Bevin also is a Republican. Unless bipartisan support can be arranged for the gambling bill, the odds are stacked against it.

In the recent past, several GOP leaders in the Kentucky legislature said they were not in support of such a bill. One even suggested he had not heard that such a bill might be introduced to the Kentucky legislature, despite a consultancy firm hired by Kentucky’s government recommending expanded gambling.