A Kentucky Senate committee took up one of four gambling bills passed by the House, advancing the pari-mutuel modernization bill.
The Senate Committee on Licensing and Occupations advanced House Bill 607 on Tuesday by an 8-0 vote. But first Senate Majority Floor Leader Damon Thayer added an amendment with four changes.
Last year, Thayer co-chaired the pari-mutuel wagering task force along with Rep. Adam Koenig, the bill’s author. The task force formed as a response to the legislature passing historical horse racing legislation last session.
The bill now heads to the House floor. If it passes there, it needs to return to the Senate for concurrence on the changes. Given the House sponsor’s support of the amendments, that shouldn’t be an issue.
“We passed a bill I thought had so much goodness that we couldn’t pack any more into it,” Koenig said. “But the senators have figured out how to do so, and I appreciate that.”
Senate committee changes to House bill
Thayer explained the four changes made in the committee substitute:
- Allows local governments to impose occupational sales taxes on racetrack extensions.
- Eliminates language requiring the display of information on historical horse racing machines. Regulation already covers this issue.
- Allows historical horse racing machines to put breakage back into betting pools.
- Clarifies that Churchill Downs’ Derby City Gaming is not considered a track extension.
For the local occupational sales tax change, Thayer added that Kentucky racetracks are exempt from paying the tax because of all the other taxes they pay.
Each track is allowed one extension, which are standalone historical horse racing facilities. Extensions opened in Bowling Green (Kentucky Downs) and Newport (Churchill Downs), and three more will open soon in Williamsburg (Keeneland/Kentucky Downs, Owensboro (Ellis Park) and downtown Louisville (Churchill Downs).
Since the extensions sit next to other businesses required to pay this tax, Thayer thought it fair to allow local governments to tax these facilities.
Details of Kentucky Pari-mutuel modernization bill
The pari-mutuel modernization bill came out of a desire to increase revenues to the state and make other changes to horse betting after the historical horse racing passage.
Fiscal analysis projects the changes in taxing and distribution could direct an additional $15 million annually to Kentucky’s general fund.
Here are some of the main points of HB 607:
- Taxes every pari-mutuel wager at 1.5% of gross revenue.
- Changes the distribution of live and HHR taxes to direct more money to the general fund.
- Eliminates breakage.
- Eliminates the admission tax.
- Requires operators to maintain a self-exclusion list and share that list with the Kentucky Horse Racing Commission for other operators to use.
- Allows Kentucky Thoroughbred Development Fund money to go to claiming races.
- Directs funds to university equine industry programs.
“This is a very significant piece of horse racing reform,” Thayer said. “As is appropriate, it will lead the country in horse racing policy. I suspect other states will look at things we’re doing here and follow the lead if this is passed into law, and adopt some of these measures in their own states.”
KY Sports betting bill stays alive
Given the important role the horse racing industry plays in Kentucky, it’s no surprise that the committee quickly took up the pari-mutuel modernization bill.
But the Kentucky House also sent over bills authorizing sports betting (and online poker), establishing and funding a Problem Gambling Assistance Fund and banning gray machines. It was notable that the Senate committee did not take up those bills.
But Thayer did read the HB 606 on the Senate floor Tuesday in a procedural move to keep the bill alive. In Kentucky, bills need to be read into the record three times on three separate days.
The Kentucky legislature only meets again Wednesday before breaking for 10 days, then returning April 13 for the final two days of the session.
By reading the KY sports betting bill into the record Tuesday and Wednesday, Thayer keeps it alive for Koenig to build support in the Senate.
“It’s an uphill battle,” Thayer told local reporters Tuesday. “There’s still a lot of opposition for religious reasons in rural areas in the state.”
Koenig tells PlayKentucky that he doesn’t think the sports betting bill is in trouble. He just thinks the sports gambling bill will take more educating in the Senate.
“I have until 11:59 pm on April 14th to get it passed, and I’m going to work it until then,” Koenig said.
