Ky. Candidates Debate Ideas for More Gambling

Published July 1, 2007

Proposals to expand gambling at Kentucky’s famous horse racing tracks became the talk of the just-completed gubernatorial primary.

Five of the six Democratic candidates expressed strong support for placing on the ballot a constitutional amendment to allow expanded gambling.

Both former Lt. Gov. Steven Beshear and Louisville businessman Bruce Lunsford–the top Democratic vote-getters in the May 22 primary election–support expanded gaming.

Candidate Expects $500M Boost

Beshear offered the more aggressive position, promising to use the governor’s bully pulpit to persuade Kentuckians to support a plan for casino gambling that would generate an estimated $500 million annually. Lunsford supported more limited casino gambling and emphasized the need for strict regulation and steps to ensure it provides the promised financial boost.

Such proposals won’t help the economy, says Chris Derry, president of the Bluegrass Institute, a free-market think tank.

“Expanded gambling is a horrible excuse for the absence of economic development in Kentucky,” Derry said. “Instead, we need to take proven steps such as passing a right-to-work law that would reduce our sky-high unemployment rate and reduce the ranks of people who depend on the state government to pay their bills.”

Republicans Opposed

None of the three Republican gubernatorial candidates supported expanded gambling, although Gov. Ernie Fletcher (R) promised not to stand in the way of a referendum. But Fletcher made it clear he does “not believe [gambling] would have a significant positive economic impact on our state.”

Conservative groups such as The Family Foundation agree.

“If gamblers lose their paychecks–their discretionary income–they won’t be able to buy a new car or get new clothes,” said Richard Nelson, a policy analyst with the foundation. “The research indicates that bankruptcies go through the roof, sales go down in the retail sector, tax revenues go down, and unemployment goes up.”

Other Tracks Shuffle Money

Other observers, led by the Kentucky Equine Education Project (KEEP), strongly disagree. Supporters of expanded gambling say the existence of casinos at horse racing tracks–called “racinos”–in nearby states results in smaller racing fields at Kentucky’s casino-less tracks, smaller purses, fewer people betting less money, and operations facing the prospect of going out of business.

KEEP officials say the state needs options for additional gambling, especially at the state’s horse tracks and along some of its borders. They say a recent decision by Indiana to expand gambling at Hoosier tracks puts additional economic pressure on Kentucky’s signature industry.

KEEP strongly supports allowing racinos as a way to create bigger purses and racing fields and compete with racetracks in other jurisdictions that offer such gambling.

“If we don’t do this, other racetracks in other states will continue to raise purses [and] attract larger field sizes, which also entices more horse players to bet the races at those tracks,” said Patrick Neely, executive director of KEEP. “It’s a cyclical thing.”

Others Not Convinced

But Patrick Crowley, a political reporter for the Cincinnati Enquirer who has covered the issue of gaming in Kentucky for more than a decade, said selling additional gambling opportunities as a way to prop up Kentucky’s horse industry likely will not succeed.

“I don’t think you’re ever going to pass gambling by getting people to feel sorry for the horse industry,” Crowley said.

Still, he doesn’t deny the impact of expanded gaming in other states.

“The horse industry is under siege,” Crowley acknowledged.

The Family Foundation’s Nelson is not convinced racinos would provide the windfall its supporters claim.

“Businesses are hurt; communities are negatively affected; and families end up picking up the tab,” Nelson said. “It’s a poor way to develop any economy.”

Jim Waters ([email protected]) is director of policy and communications at the Bluegrass Institute for Public Policy Solutions in Bowling Green, Kentucky.