KENTUCKY
NOTEBOOK
OCTOBER 1
by Steve Moody
State Legislature gets another chance
On Monday, teachers and other state workers attended protest
rallies at several sites across the Commonwealth. They were
protesting a proposed hike in their health-care benefits and a
reduction of covered medical services. The hike would have many
state workers paying the highest medical premiums in the nation.
The teachers have threatened to strike next month if something is
not done to meet their demands. Gov. Ernie Fletcher is
expected to call for a special legislative session next month in
hopes of diffusing the problem and hammering out a budget.
Earlier this year, when the legislative session ended,
lawmakers were unable to agree to a budget. Kentucky has been
facing a $500 million deficit, which has caused the governor and
the legislature to scour the landscape looking to cut programs
and save dollars in Frankfort’s cash-strapped environment. One
thing that’s been lacking in their search, however, is for a
consistent source of revenue.
Slicing benefits and cutting programs is one thing, but
they’re never going to approach a balanced budget until another
source of revenue can be added to the coffers. Someone needs to
take the governor and the legislature on a field trip to see
where millions of potential Kentucky tax dollars are flowing.
Each and every day, along the Ohio River which flows along
Kentucky’s northern border, there’s also a steady flow of cash
from Kentucky residents to gambling boats with names likes
Argosy, Belterra, The Glory of Rome and Aztar. These riverboats
have become popular in the Midwest and are operated mostly by
Nevada-based casino operators, Caesar’s and Harrah’s among others.
A trip to the parking lots of these riverboats finds car after
car with Kentucky license plates and buses streaming in with all
manner of Kentuckians eager to try their luck at the tables or
more likely at the slot machines. Caesar’s operates the Glory of
Rome, docked near New Albany, Indiana, just across the river from
Louisville. Belterra is a short drive from Louisville as well as
Carrollton and Lexington. Argosy brings in customers from
Lexington, eastern and northern Kentucky, as well as the
Cincinnati, Ohio, metropolitan area. Aztar is docked in
Evansville, Indiana, and attracts a good number of players from
western Kentucky.
The bottom line is these boats are taking in tens of millions
of dollars from Kentucky residents and the winners and the losers
are contributing to the general economy of the state of Indiana
as well as providing a direct subsidy to the Indiana horse racing
industry.
A portion of every admission to an Indiana riverboat is
earmarked for the Indiana horse racing industry. The benefit to
Hoosier Park, Indiana Downs and others is more money to offer
higher purses, make capital improvements and enhance their
racing programs, making them more competitive with their southern
neighbor. While the gap between Indiana racing and Kentucky
racing is still distinct when you’re talking about Keeneland and
Churchill Downs, the gap has narrowed significantly with respect
to Turfway and Ellis Park.
Many Kentucky owners and trainers are sending their horses,
especially claimers, to race in Indiana or West Virginia (another
slots-enhanced racing state) to take advantage of higher purses.
Even when you factor in higher shipping costs, it still makes
financial sense for many Kentucky owners.
This is something the legislature could correct quickly, but
the members, especially the Republican-controlled state senate
led by David Williams, have consistently
stonewalled any movement to pass a bill. Passage would be a major
shot in the arm to one of the commonwealth’s biggest industries
and one that puts millions of dollars into the Kentucky General
Fund. When you look and see what’s happened in other racing
states that have added alternative gaming, you have to wonder
what Kentucky’s elected officials are doing.
Williams, an anti-gambling advocate, claims to be taking a
moral position here by saying he’s opposed to any additional
gambling in the state. That might fly if there were no gambling
allowed in the state now, but betting on horse racing has been
legal in Kentucky more than 100 years and a state lottery has
been around for nearly two decades.
As more and more racing states throughout the country begin to
allow other forms of gaming, Kentucky’s racing program will
struggle to keep up when it comes to matching purses and
attracting the best horses. If and when other gaming becomes
legal at New York racetracks, the Kentucky racing industry will
face a crisis of major proportions.
It is way past time for the legislators to get their heads out
of the sand, although representatives of Kentucky’s race tracks to whom I
spoke don’t harbor any illusions that something will be passed
during this special session.
If not, Kentucky voters can send a message on
November 2.