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June 2012
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Expanded gambling looming as big issue


FRANKFORT - Those who support legalizing casinos in Kentucky are back in the starting gate, mounting another campaign that promotes expanded gambling as a lucrative revenue source during lean times in hopes of a strong stretch run for a proposal mired in defeat.

The latest version will be presented as a proposed constitutional amendment that would go on the 2014 fall ballot in Kentucky if approved by the General Assembly. Proposals have been drafted for the House and Senate.

Its most ardent backers insist it's not such a long-shot, but even they sound worn down.

"This is probably the last chance to do it, I really think," said Rep. Larry Clark, D-Louisville, the second-ranking House member.

Critics sound confident the proposal will fall short of the finish line, again.

"We think they've got the same problem they've always had - which is they don't have the votes," said Martin Cothran of The Family Foundation. "It's not good for the state, it's not good for the horse industry, it's not good for problem gamblers."

Kentucky has a long history of wagering on horses but the Bible-belt state has resisted casinos.

Stepping forward as lead sponsors for the latest proposals will be two high-ranking lawmakers. Senate Majority Caucus Chairman Dan Seum, R-Louisville, will be leading the push in the Senate and Clark, the House speaker pro tem, will do so in the House.

Seum's proposal would allow up to seven casinos statewide but doesn't specify where. Locations would be determined by companion legislation.

His proposal would designate 10 percent of gambling revenue to assist the state's horse industry, bolstering race purses and breeders' incentives to encourage horse owners to race in Kentucky. The state's tracks have lost a competitive edge to other venues.

Seum said his proposal would allocate other casino revenues for job creation, education, human services, local governments, public safety and a one-time bonus for military veterans who served in Operation Desert Storm and the wars in Iraq and Afghanistan.

Seum said expanded gambling would raise hundreds of millions. It's a temptation he hopes is too hard to resist for lawmakers struggling to meet the demands for spending on education, health care and social services.

Crafting a new two-year state budget will be at the top of the agenda.

"The state needs the money," Seum said. "It's either pass a tax or do this. Which one do you want?"

A group of the state's top economists predicted recently that modest growth in Kentucky's economy will add nearly $500 million in revenue to the state's General Fund budget by 2016. But Gov. Steve Beshear has warned the additional cash won't be enough to cover the needs of state government.

Clark's proposed constitutional amendment would give the legislature authority to pass casino gaming. A companion bill would fill in the blanks, allowing up to eight casinos statewide, including five run by racetracks.

The horse industry would receive a share of casino revenues. Gambling money would also bolster education and shore up public pensions.

Clark said voters deserve to know such details before the deciding, if given the chance.

"I think the voters need to know, if we pass casino gaming, where the money is going to go," he said.

Beshear, who campaigned in support of expanded gambling as a revenue producer, said he sees "encouraging signs," but noted he's pushed the issue for six years without success.

"I don't harbor false hopes, but I'm encouraged that for the first time we're getting some very meaningful conversations from both sides of the aisle in both houses," Beshear said.

Supporters said casinos could start generating state revenue in the second year of the next two-year budget cycle that begins in July, through license fees paid by operators.

House Speaker Greg Stumbo said he hasn't seen a surge in House support for expanded gambling, but said "there may be a path that opens" to put the issue on the ballot. He said it needs to be accompanied by legislation spelling out details on casino sites and how revenue is spent.

"If you don't, there's going to be all these ghosts and goblins that come out ... over what's going to happen and who's going to get them," he said.

Stumbo said he doesn't favor setting aside casino licenses for racetracks.

"The tracks ought to be able to bid on those licenses, just like anybody else does," he said.

Cothran predicted competing interests in vying for casino sites will undermine the effort.

"They either guarantee the horse industry a monopoly in the Constitution ... or they let it outside the horse industry with some generic amendment to the Constitution and then they lose the support of the horse industry, which they have to have," he said.

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