Archive for the ‘Kentucky’ Category
Thursday, July 2nd, 2009
By Ray Paulick
There were several byproducts of the Kentucky General Assembly’s special session called last month by Gov. Steve Beshear to tackle the state’s budget crisis and consider a bill to allow video lottery terminals or slot machines at racetracks.
One of those was anger, an emotion directed largely at Republicans in the Kentucky Senate who defeated House Bill 2, the VLT legislation that would have leveled the playing field with so many other racing states in the region. Another was a feeling of abandonment by the government at a time when people in various parts of the horse industry are hurting. Yet another was a belief among many that the end is near for Kentucky’s year-round racing circuit, with Ellis Park and Turfway Park the tracks most vulnerable to being closed.
The anger many of us felt in the wake of the defeat of the VLT legislation is perfectly normal. The Republicans, led by the bully of the Senate, David “Blackjack” Williams, are the villains in this saga. Williams, who likes to gamble at casinos in nearby states like Indiana and Mississippi, is one of those politicians who wants to “protect us from ourselves” and legislate morality. But Williams can’t, and hasn’t, stopped countless Kentuckians from driving across bridges into Illinois or Indiana or West Virginia and gambling to the tune of hundreds of millions of dollars a year, or more—to the benefit of horse racing in those states and to the detriment of Kentucky’s signature industry.
He’s enlisted people like Damon Thayer, the “Senator from Scott” who was jeered during a horse industry rally at Keeneland held after the Senate Appropriations & Revenue Committee voted to kill House Bill 2. I’ve known Thayer for more than 20 years, and like him. We’re about as far apart on the political spectrum as two people can be, but we both want to see the horse industry succeed.
I’m amused that Thayer, who comes from a Republican Party that believes government should stay out of people’s lives, feels Frankfort politicians should keep Kentuckians from gambling on slot machines in their home state to the benefit of the horse industry. He would rather raise taxes on (guess what?) other kinds of gambling, including the lottery and horse racing. In a speech on the Senate floor during the special session, Thayer said he favored raising taxes on these other forms of gambling so the horse industry would get temporary, Band-Aid relief. He was simply hawking Blackjack Williams’ alternative to VLTs, and I’m sure Williams will reward him for his loyalty.
I encourage you to view Thayer’s speech, which can be seen by clicking here, and decide for yourself if he is a friend or foe of racing.
The interesting thing about the inability to get more Republicans behind this bill is that so many powerful horse breeders in Kentucky are major contributors to the Republican Party on the federal level. Perhaps there is a disconnect between people like Kentucky Sen. Mitch McConnell, the de facto head of the Republican Party in Kentucky, and Blackjack Williams, the strongman of the state Senate. (Williams, according to many sources, takes his direction from homebuilder Don Ball, who as former head of the Kentucky Thoroughbred Association owes an explanation to the horse industry for his opposition to leveling the playing field with VLTs or slots.)
The feeling of abandonment was countered at that same horse industry rally at Keeneland when more than 20 Republicans and Democrats from the state House and Senate came to show their support to the crowd of about a thousand people. As Keenelend’s Nick Nicholson said, people in the horse industry should know that they have more than a few friends in Frankfort. There seemed to be no quit in those who gathered inside Keeneland’s sale pavilion that night, and let’s hope the enthusiasm they showed can carry forward to 2010 and beyond, if necessary.
The industry didn’t have enough friends, though, and it’s more important now than ever to get involved politically, to contact those Senators and Representatives who voted against House Bill 2 and let them know your feelings but to also contact those who supported the industry and thank them for what they did. Respectfully tell the opponents of the VLT legislation that you will work to replace them with people who are willing to support the horse industry in Frankfort.
Finally, there is the issue of how long this industry can maintain a year-round circuit without the economic necessity of slot machines at the tracks. Racing in Kentucky experienced significant growth during the late 1980s and early to mid 1990s when tracks capitalized on in-state and out-of-state simulcasting, but it’s been stagnant in recent years as other states have improved their purse structure thanks to slots.
Ron Geary, the owner of Ellis Park, has said 2009 would be the Western Kentucky track’s final year, but he’s apparently reconsidered that stand after hearing an appeal from local government officials. It’s a good thing that Turfway Park, which sits on land more valuable for development than for racing, is owned in part by Keeneland. Racing will not thrive at either track until the legislature recognizes the need for help, but perhaps it will survive another year or two.
In the meantime, channel the emotions that came out of this special session in a positive way by supporting those individuals in state government that support our industry. And let’s work to replace those who aren’t willing to give racing the tools it needs to compete. Know who your friends are…and aren’t.
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Tags: blackjack williams, damon thayer, david williams, Don Ball, ellis park, house bill 2, Keeneland, kentucky slots, kentucky vlt legislation, mitch mcconnell, nick nicholson, Paulick Report, racinos, Ray Paulick, ron geary, turfway park
Posted in Kentucky, Slot machines | 20 Comments »
Monday, June 29th, 2009
By Ray Paulick
Kentucky’s special legislative session may seem like ancient history now, but I’m going back to revisit a misleading article published in the Lexington Herald-Leader on June 14, one day before members of the state House and Senate met in the capital in Frankfort.
Under the headline, “100,000 Horse Industry Workers?” the article written by John Cheves called into question the number of jobs attributed to Kentucky’s horse industry. It accompanied another piece by Cheves, entitled “Horse Industry Has Problems,” that suggested things in Kentucky aren’t really as bad as people in the horse industry are making them out to be.
The intent of the two articles, I assume, was to convince state legislators, who may have been on the fence about whether or not to vote “yes” on racetrack video lottery terminals (VLTs) or slot machines during the special session, that Kentucky’s horse industry a) isn’t really as big as people have been saying it is and b) no other state is ever going to challenge Kentucky as the national leader in foal production, so its tracks don’t need to offer the same expanded wagering menu that so many other states have.
The article about the number of people who are employed as a result of Kentucky’s horse industry was borderline outrageous. The author seemed to dismiss the 2005 economic impact study commissioned by the American Horse Council and its conclusions that there are approximately 96,000 direct and indirect jobs in the Bluegrass State resulting from the horse industry (all breeds and disciplines). Kentucky was one of 15 states for which detailed information was provided as part of a national study conducted by Deloitte Consulting. The study concluded there were 51,900 people directly employed in the horse industry in Kentucky. It also said that as a result of the horse industry’s spending power, there were another 44,100 “induced” or indirect jobs. Those jobs are not in the horse industry (they represent all kinds of jobs that horse industry people are responsible for supporting), but they wouldn’t exist if the horse industry wasn’t here. It’s a safe bet that if we lose some of those 51,900 direct jobs, the “induced” employment will fall as well.
The writer seemed to be saying the number was somehow “fudged,” that smoke and mirrors were used by Deloitte to get to 96,000 jobs. Jay Hickey, the president of the American Horse Council, said to his knowledge every industry that conducts an economic impact study does exactly the same thing. “I can tell you, they didn’t come up with this methodology just for the horse industry,” he said.
The article says the Kentucky Equine Education Project uses the 100,000 employment figure in its advertisements and that it is somehow misleading. But if the writer had gone to KEEP’s website ( www.horseswork.com), he would have seen a fact sheet about the industry that claims between 80,000 and 100,000 direct and indirect jobs. If anything was misleading, it was the conclusions of the Herald-Leader article.
From a monetary standpoint, the direct economic impact of the horse industry in Kentucky is $2.3 billion, according to the same study. The total impact on the state (direct and indirect) is $3.5 billion.
Incidentally, Deloitte concluded that the total number of direct jobs in the horse industry across the United States is 453,612, and there are nearly one million “induced” jobs, bringing the total direct and indirect employment to 1,411,333. Nationally, the direct economic impact is $39 billion, and it increases to a total of $102 billion when the indirect impact is factored in.
But let’s go back to Kentucky for a minute and the Herald-Leader story, which concluded there are only 51,000 horse industry jobs in the state—not 96,000 or 100,000.
That’s still an awful lot of jobs. How many other industries in Kentucky employ that many people? One thing’s for certain: the number of jobs in the horse industry will be lower the next time the legislature meets. Horses and the jobs that go with them are leaving the state to race where purses are higher and breeders’ incentives more lucrative.
That’s no myth.
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Tags: deloitte consulting, economic impact study, horse industry economic impact, horse industry employment, jay hickey, kentucky equine education project, kentucky horse industry employment, kentucky's horse industry economic impact, lexington herald-leader, Paulick Report, Ray Paulick
Posted in Kentucky, Thoroughbred Business | 40 Comments »
Wednesday, June 24th, 2009
By Ray Paulick
Brereton Jones, the former governor of Kentucky and the chairman of the Kentucky Equine Education Project, pulled no punches during a horse industry rally at Keeneland Wednesday night when talking about what derailed House Bill 2, legislation that would have permitted video lottery terminals at state racetracks and enhanced purses. In an obvious reference to Senate President David “Blackjack” Williams, the "anti-gambling" Republican from Burkesville who likes to visit riverboat casinos in neighboring states, Jones talked about how a “third-world dictatorship” killed the legislation in a Senate committee controlled by Williams’ followers. “The only way to get rid of a dictatorship is through a revolution,” Jones said, “and the revolution starts here tonight. We are going to make this happen.”
 That brought the crowd of over 1,000 to their feet in one of many standing ovations during a rally that in some ways demonstrated the resilience, hope and perseverance of horse people. Individuals from virtually all segments of the horse industry attended.
Nick Nicholson, president of Keeneland, served as the emcee of the rally, which was scheduled less than 24 hours earlier in the wake of the defeat of the VLT legislation in the state capital of Frankfort. It began shortly after 7 p.m., when Gov. Steve Beshear and First Lady Jane Beshear arrived to the first standing ovation of the night.
“I know that we’re disappointed in the final result,” Nicholson said about the legislation that was approved by the House before being killed in the Senate Appropriations and Revenue Committee. “We’re angry, scared, and more determined than ever. This industry has more solid friends in Frankfort now than it did a month ago. Let me be real clear, no question about it, no doubt. This fight ain’t over yet. We as an industry are more unified than we have ever been.”
Nicholson introduced Kentucky legislators on hand who were among the horse industry’s friends and supported the VLT bill. Present were House members Rocky Adkins (D-Boyd, Elliott, Lawrence, Rowan Counties); Linda Belcher (D-Bullitt); Leslie Combs (D-Harlan, Letcher, Pike); Robert Damron (D-Fayette, Jessamine); Kelly Flood (D-Fayette); Reginald Meeks (D-Jefferson); David Osborne (R-Jefferson, Oldham); Sannie Overly (D-Bath, Bourbon, Fayette, Nicholas); Ruth Ann Palumbo (D-Fayette); John Will Stacy (D-Menifee, Morgan Rowan and Wolfe); John Tilley (D-Christian, Trigg); and Susan Westrom (D-Fayette).
Supporters on hand from the Kentucky Senate were: Walter Blevins Jr. (D-Boyd, Elliot, Fleming, Lawrence, Rowan); Tom Buford (R-Boyle, Fayette, Garrard, Jessamine); Perry Clark (D-Jefferson); Denise Harper Angel (D-Jefferson), Gerald Neal (D-Jefferson); Joey Pendleton (D-Christian, Logan, Todd); Kathy Stein (D-Fayette); Johnny Ray Turner (D- Breathitt, Floyd, Knott, Letcher); and Ed Worley (D-Lincoln, Madison, Rockcastle).
Nicholson also thanked House Speaker Greg Stumbo and Speaker Pro Tem Larry Clark, co-sponsors of the bill. Neither was able to attend the rally.
 One local politician who wasn’t mentioned by name but was referred to several times as the “Senator from Scott” (county) was Republican Damon Thayer, a horse industry consultant and former Breeders’ Cup and Turfway Park executive who has been the point person for the horse industry on legislation in Frankfort but has been silent on the issue of VLTs or slots. Thayer is not a member of the A&R Committee that killed the VLT bill, but today on the Senate floor he reportedly said Beshear and anyone else who wants to support the horse industry should get behind an alternate bill proposed by Williams that would divert funds toward purses through a tax on the state lottery, out of state wagers on Kentucky races, and charitable gaming. Those comments angered Senate minority leader Ed Worley, who gave an impassioned speech on the floor of the Senate criticizing Thayer and others who said Beshear doesn’t support the horse industry. In that speech, which was shown on video at the horse industry rally, Worley challenged those who criticized Beshear to come to Keeneland Wednesday night and hear first-hand from members of the horse industry.
Worley was then introduced at the rally and began his brief talk by asking, “Would the senator from Scott please stand up?” a comment that brought derisive laughter from the standing room only audience. Thayer apparently was not present.
“You do not deserve people who represent districts with horse tracks and horse farms, if they vote against the horse industry. You need to remember them on election day,” Worley said.
Patrick Neely, the executive director of KEEP, was even more blunt in his remarks to the crowd. “Elections matter,” Neely said. “We cannot forget that Alice Forgy Kerr–whose district is home to so many horse farms and to Keeneland—voted no. Only Tom Buford (the lone Republican supporter on the A&R Committee) had the courage to vote yes,” a comment that brought the crowd to its feet with thunderous applause. Another Republican supporter, Rep. David Osborne, was cited as evidence that the VLT legislation was not a partisan bill.
Beshear said he felt if the VLT bill had gotten a chance for an up-or-down vote on the Senate floor, it had a good chance to be approved. “Some of these senators are now looking for cover,” Beshear said. “They’ve thrown out some quick proposals. The senator from Scott (Thayer) said we could even take the money out of the general fund. My friends, they are looking for cover, and I’m telling you: Don’t let ‘em find that cover.”
Now that Ohio appears to have racetrack slots on a fast track to passage, Beshear said Kentuckians will be “educating Ohio’s kids, building Ohio’s roads,” by gambling at Ohio casinos, just as they’ve been doing at Indiana casino boats. “It’s time we kept that money at home to help our people,” he said.
“Tonight is not an ending,” Beshear added. “It’s a beginning of a campaign that’s not going to quit until we have done our job to save our beloved horse industry.”
It’s time to do one of two things, Beshear said. “Change some of the state senators’ minds, or we’ve got to change some of the state senators. Over the next 18 months, let’s get this done.”
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Tags: A&R committee, Appropriations and Revenue Committee, brereton jones, damon thayer, david osborne, david williams, denise harper angel, ed worley, flt legislation, gerald neal, greg stumbo, house bill 2, jane beshear, joey pendleton, john tilley, john will stacy, johnny ray turner, kathy stein, Keeneland, kelly flood, kentucky equine education project, larry clark, leslie combs, linda belcher, nick nicholson, patrick neely, Paulick Report, perry clark, racinos, Ray Paulick, reginald meeks, robert damron, rocky adkins, ruth ann palumbo, sannie overly, steve beshear, susan westrom, tom burford, walter blevins jr.
Posted in Keeneland, Kentucky, Slot machines | 23 Comments »
Wednesday, June 24th, 2009
By Ray Paulick
Jess Jackson, the principal owner of star filly Rachel Alexandra, said during a New York Racing Association media teleconference on Wednesday afternoon he has no intention of ever running the Kentucky Oaks and Preakness winner on “plastic,” or synthetic racetracks, and ruled out any chance she would compete in this year’s Breeders’ Cup World Championships.
However, Jackson did say that if the daughter of Medaglia d’Oro remained healthy there was a very good chance she would remain in training in 2010 as a 4-year-old, with the Breeders’ Cup at Churchill Downs a year-end goal.
Jackson and Rachel Alexandra’s jockey, Calvin Borel, answered a wide range of questions from the media in advance of Saturday’s Mother Goose at Belmont Park, in which Rachel Alexandra will be heavily favored. NYRA is offering free admission for women and giving away 10,000 pink bracelets embossed with Rachel Alexandra’s name in conjunction with the announcement by Jackson and his wife, Barbara Banke, to give a portion of any prize money won by the filly to the Susan B. Komen Race for the Cure for breast cancer.
While he gave no indication where Rachel Alexandra would surface following this weekend’s race against fellow 3-year-old fillies, Jackson said he wanted to run her against colts again, and included the nine-furlong Haskell Invitational at Monmouth Park Aug. 2 and 10-furlong Travers at Saratoga Aug. 29 among the possibilities for her this summer. Each race for 3-year-olds carries a $1-million purse. He also listed as possible starts the $300,000 Coaching Club American Oaks for 3-year-old fillies going 10 furlongs at Belmont Park July 25; the $1-million Delaware Handicap , a 10-furlong event for fillies and mares, 3 and up at Delaware Park July 19; and the $600,000 Alabama for 3-year-old fillies going 10 furlongs at Saratoga Aug. 22. The spacing of her races was important, Jackson said, along with her physical condition.
Jackson said he would love to meet reigning filly and mare champion Zenyatta, but that it would have to happen outside of California. “I would hope we’d meet, but if it’s not in the stars, it’s not going to happen,” he said. “They’re going to have to come east or to some neutral track,” he said. “I’m not going to run on plastic (all of California’s major tracks have a synthetic surface instead of dirt). We don’t need to risk her that way.” Jackson said synthetic tracks tend to favor turf horses and that Rachel Alexandra has proven herself on the dirt. “You can’t predict the outcome of a race on plastic,” he said. “You see horses all finishing in a bunch.” Also, Jackson said the various synthetic manufacturers (Pro Ride, Cushion Track, Polytrack, Tapeta) each produce varying surfaces. “Man is interfering with nature,” he added.
Borel said he is confident the drop back to a one-turn nine-furlong race for Rachel Alexandra will not be a problem after going around two turns in her recent races. “She’s very versatile,” he said. “I’m going to ride that filly with confidence. For me to go out there and not ride her with confidence would be stupid.”
In other news, Jackson, a Californian who is a major contributor to both the Democratic and Republican parties in Kentucky, said he supported recently defeated legislation in Kentucky to bring video lottery terminals or slot machines to the state’s racetracks, though he admitted he “didn’t work hard for the bill because I was back working in California on the wine business. When I support a party or candidate, I do it so they can vote their own conscience. I look at the slots and gambling as an interim or short-term solution. The long term is best served if we can get together and voluntarily form a major league office with a commissioner.”
Jackson also said he “has been approached and am involved in trying to save Santa Anita Park,” which is scheduled to be sold as part of the Magna Entertainment bankruptcy proceedings. The Thoroughbred Owners of California recently confirmed it is planning to bid on the track in a bankruptcy auction. Jackson added that he is considering sending both mares and stallions to his home state in order to improve California’s breeding industry.
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Tags: alabama, Calvin Borel, coaching club american oaks, delaware handicap, haskell invitational, jess jackson, kentucky slots, Magna Entertainment, medaglia d'oro, mother goose, New York Racing Association, nyra, Paulick Report, Rachel Alexandra, Ray Paulick, santa anita park, susan b. komen race for the cure, travers, zenyatta
Posted in Breeders' Cup, Kentucky, New York Racing Association, Rachel Alexandra, Slot machines, Synthetic surfaces | 30 Comments »
Monday, June 22nd, 2009
By Ray Paulick
Monday was a sad day in Kentucky for the Thoroughbred horse industry. It wasn’t a great day for democracy, either.
A Senate committee stacked with Republican followers of Senate President David “Blackjack” Williams voted 10-5 not to allow the full Senate to consider VLT legislation designed to close Kentucky’s budget deficit, improve education, and allow the horse industry to compete with other states in the region that have slot machines. The House passed the bill last week under the direction of Speaker Greg Stumbo, but the Senate committee vote went along party lines, with nine of 10 Republicans voting to kill the bill. Four of five Democrats supported it, with one abstaning. (Click here for a live blog including the votes by each Senator.)
Williams, who likes to play blackjack at Indiana and Mississippi riverboats but for some reason opposes Kentuckians gambling in their own state, brought a smokescreen strategy to the special session called by ineffectual Democratic Gov. Steve Beshear. That strategy included a tax-and-spend proposal passed by the Republican-controlled Senate but which never had a chance of getting approved by the Democratic-controlled House. The smokescreen strategy allowed Williams’ Republican yes men/women to say they tried to help the horse industry by voting for the Williams proposal. It would have raised taxes on the lottery, charitable gambling and out of state bets on Kentucky races and provide money for purses and breeders’ incentives. (The out-of-state betting tax increase was a preposterous idea, since out of state tracks would have simply dropped the Kentucky signal on tracks like Turfway and Ellis Park and done more damage than good.)
Some of the Republicans who voted no on the issue probably were representing the strong moral beliefs of their constituents. But others who voted no, specifically the Lexington/Fayette County Senator, Alice Forgy Kerr, were sending a clear message to people in the horse industry that they do not matter.
Kerr is said to be very chummy with Mira Ball, who with homebuilding husband Don Ball is one of the largest contributors to Republican campaign coffers. The widespread belief of many in the horse industry is that the Balls and their Ball Homes want to see the horse industry fail, and the price of Central Kentucky acreage drop so they can build more tract housing. Don Ball and David Williams are closely allied in their opposition to gambling…at least by other people.
The Kentucky Equine Education Project or affiliated political fund-raising groups must now turn their attention to people like Kerr and other elected officials in Kentucky who can be defeated in future elections by well-funded opponents who truly want to help the horse industry.
If Williams was the bully of this aborted effort by the horse industry to level the playing field with other states, Gov. Steve Beshear was the 98-pound weakling. He blew his opportunity in January 2008 to push the same legislation after winning election in a landslide over Republican Ernie Fletcher. And when he called the special session and put the VLT legislation on the agenda, Beshear failed to do what effective politicians do instinctively: call their friends and make sure you’ve got their support, and call your opponents and tell them in no uncertain terms why they need to be with you.
Another politician missing in action on this bill was Sen. Damon Thayer, a Republican who is a consultant in the Thoroughbred industry and is a former executive at Turfway Park and the Breeders’ Cup. Thayer, who like any member of the state GOP who wants committee appointments has to fall in line with Williams, was silent on the slots issue. He isn’t a member of the Appropriations and Revenue Committee, but he could have influenced a more positive outcome and didn’t. Thayer never came out with a position on the bill, to my knowledge.
What happens next? There is only a glimmer of hope that some parliamentary procedures can bring the bill to a vote in the full Senate during this special session. Beyond that, we are looking at the January 2010 legislative session.
The problem is that, by then, Ellis Park will have had a disastrous summer meeting, and Turfway Park will be in a much less competitive position than they are now. The prospects of Kentucky losing its year-round circuit are real. The loss of breeding stock to other states or Canadian provinces is real. The summer and fall yearling sales will be down anywhere from 25%-40%, and the breeding stock will match that or worse.
The downward spiral of Kentucky’s horse business, as Keeneland’s Nick Nicholson pointed out in the Senate hearing, has come faster and harder than anyone could have predicted. And I hate to say this, but it’s not going to get any better without real legislative action.
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Tags: alice forgy kerr, ball homes, damon thayer, david williams, Don Ball, greg stumbo, house bill 2, kentucky equine education project, kentucky slots, mira ball, nick nicholson, Paulick Report, racinos, Ray Paulick, steve beshear
Posted in Kentucky, Slot machines | 58 Comments »
Monday, June 22nd, 2009
UPDATE: The Kentucky Senate’s Appropriations and Revenue Committee rejected VLT legislation by a 10-5 vote on Monday night. The vote went pretty much along party lines, with Sen. Tom Buford the only one of 10 Republicans present voting yes to send the bill to the Senate floor. Four of the five Democrats on the committee voted yes, with one abstaining.
Below is a live blog of the hearing….
After the Kentucky House of Representatives passed video lottery terminal legislation on Friday, the Senate’s Appropriations and Revenue Committee will give the bill a hearing late Monday afternoon. Ray Paulick is on the scene at the Kentucky Capitol in Frankfort and will provide up-to-the-minute coverage.
4:45 p.m. … The committee room was packed with people from the horse industry, but those without seats were told they would have to leave and move to adjacent room. Apparently, the Kentucky Senators may have feared an uprising.
4:50 p.m. … The hearing is called to order by Sen.Charlie Borders,the committee chairman who says opponents and proponents of House Bill 2 (VLT legislation) will each have up to an hour to provide testimony. He dismissed the notion that the bill would not get a fair hearing. He introduces Nick Nicholson of Keeneland, who begins by saying that he knew the bill would have a fair hearing because he knows the principals involved. Nicholson says the industry faces a problem not because of anything that’s happened in Kentucky, but because of what’s happening in competing states that have moved to offering slot machines. Eleven of 12 of Kentucky’s most compoetitive states offer alternative gaming at racetracks, Nicholson said, but the next time he testifies it will be 12 of 12 if Ohio goes in that direction, which Gov. Strickland said is now a necessity.
4:58 p.m. … Six casinos along the Kentucky border had a net win of $1.44 billion in 2008, Nicholson said. "I do know that hundreds and hundreds of millions of dollars of that $1.44 billion are hemorrhaging from Kentucky into Indiana," Nicholson said.
5:00 p.m. …. Nicholson tells the panel that Kentucky’s horse breeders are the best in the world and that they are doing their job in producing the world’s best horses. "We aren’t going away tomorrow," he said. But Nicholson added that what is in crisis is Kentucky’s year-round racing circuit. He said the downhill slide of the racing problem has come more quickly than expected. We didn’t think Churchill Downs would have to cancel one day of race a year, he said. "We thought we had more time." What’s changed the dynamic and caused the decline to happen more quickly than expected, was the bump in purses at Indiana racetracks, the increases in purses in Pennylvania and West Virginia, and the addition of a new track, Presque Isle Downs.
5:05 p.m. … Nicholson called the existing proposal "more moderate, more termparate," saying that the expansion of gambling would not be geographical. "I think it gives us the tools as an industry to compete with other states….We are asking you to give us the tools that our competitors have been given by their state government."
5:10 p.m. … In the absence of House Speaker Greg Stumbo, Nicholson walked through the legislation and the differences between Stumbo’s version and the language proposed by Kentucky Gov. Steve Beshear. Among the differences, it’s worth noting, is that Stumbo’s version requires tracks to maintain the same number of racing dates they currently have. Stumbo’s version also charges a higher licensing fee to the various tracks, over $500 milliion to paid to the state over five years, versus $360 million in Beshear’s version.
"All 138 members of the legislature without exception want to help the horse industry," Borders said. He then referenced the "alternate" legislation proposed by Senate President David Williams that passed out of the Senate last week. That measure, obviously, was meant to be a pre-emptive measure to slow the momentum of the VLT legislation.
5:15 p.m. … Question time. Vice chair Bob Leeper wants to know if the projections were made before the financial markets meltdown of last September and suggests that casino gambling has taken it on the chin since then. Turfway Park’s Bob Elliston replies that "racinos" (racetrack casinos) have shown increases since then, going against the grain of standalone casinos.
5: 35 p.m. … Sen. Shaughnessy comments about the horse industry finally being together on the issue, saying that was far from the case when slots proposals first surfaced in the capital in the 1990s. "I like the way you introduced this," Shaughnessy told Nicholson. Other industries have come to the capital for a bailout, he said, "but all you are asking for are resources to help make you competitive." He asks if the additional gaming will make it easier to market the overall racino experience, and be more than just a revenue enhancer. Tough question for Nicholson, since Keeneland is not planning to add VLTs to its racetrack and instead will share revenue from the Red Mile. "There are many, many disadvantages to being the last state to do this," Nicholson said. He added that being last does have the advantage of allowing Kentucky to see how other states have used the racinos to their benefit.
5:40 p.m. … Sen. McGaha gets a laugh from the audience when he said he’s in a hurry and demands "yes or no" answers from the slots proponents. First he asked Ron Geary of Ellis Park if he plans to run the original number of dates Ellis Park was given or the reduced number they now plan to run this year. Geary starts to give an answer that doesn’t start with "yes" or "no," then McGahah shouts "yes or no.," Geary says "yes," then McGaha says "Yes what?" I’m beginning to worry that the issue may be too complicated for some of these legislators.
5:55 p.m. … In closing, Sen. Borders reiterates his believe that every Kentucky legislator wants to helpo the horse industry, but then tips his own vote by saying, "We believe there is already a measure out there that does that. (the Williams alternate plan that taxes the lottery and out of state wagering on Kentucky racing."
The anti-gambling folks are next.
6:00 p.m. David Edmunds of the Family Foundation begins by complaining that Nick Nicholson’s PowerPoint presentation is getting stale. He also doesn’t think the VLT is constitutional, reading from Section 226 of the Kentucky Constitution. He evokes the name of Bernie Madoff in saying his type of pyramid scheme is unconstitutional under Kentucky law. How reassuring.
Edmunds continues to teach the legislature a history and civics lesson….talking about the founding fathers and the evil of lotteries and horse racing. He also said House Speaker Greg Stumbo is very bad at bad.
6:10 p.m. … Edmunds quoted from several published reports saying the Kentucky horse industry is doinig well, with great attendance at major events like the Kentucky Oaks and Derby, and even quoted from Churchill Downs CEO Bob Evans’ report to the shareholders at the company’s annual meeting, saying he had a bullish outlook for the company.
A number of senators have walked out on Edmunds’ presenation, and can’t say I blame them. Edmunds is providing statistics compiled by people who have been educated at Harvard and MIT…that’s sure to impress some of these senators. His biggest concern seems to be an increase in the suicide rate if VLTs are allowed (oh, wait, they already allowed, just not in Kentucky). That’s the last straw: Edmunds tells us that the definition of insanity is doing the samme thing and expecting different results. No, Mr. Edmunds, you are the definition of insanity.
Next witness, please!
Sen. Shaughnessy ridicules Edmunds’ accusations that the state lottery is a "blood-sucking vampire." He then reminds Edmunds that he supports Williams’ bill to tax the lottery further as means to increase purses at racetracks. Edmunds stutters and hems and haws and then mercifully is done.
6:35 p.m. … House Speaker Stumbo enters the room..,..apparently the House has adjourned for the day.
6: 40 p.m. … The next witness (whose name I did not catch) slams the Herald-Leader for its accuracy and then cites a Herald-Leader story questioning the number of jobs the horse industry says it contributes to Kentucky’s economy. He then says the horse industry doesn’t spend enough money promoting itself and said Churchill Downs should have gone to night racing years ago when baseball and football went to night games. "Welcome to the modern world," he said.
6:45 p.m. Before the head of the charitable gaming association speaks, chairman Borders recognizes House Speaker Stumbo and tells him the pro-VLT legislation team did "an adequate job" presenting their position. When riverboat casinos began in Indiana, charities on the north side of the state suffered a loss in players, Ron Morris of the charitable gaming association said. He said other developments such as anti-smoking laws have also hurt charitable gaming.
6:50 p.m. … Sen. Boswell moved to pass House Bill 2 to the Senate floor without comment. Chairman Borders said the motion was out of order but would be honored in a few minutes. That woke a few people up.
6:55 p.m. … One last speaker on the opposition side represents CAGE (Citizens Against Gambling Expansion). The spokesman for the group said people will be sold into bondage to slot machines in order to support racetracks in Kentucky, that they will spend hundreds of millions of their own money, and money they steal from their employers and credit card companies.
7:00 p.m. … Sen Boswell’s motion is made to pass the bill without expression (meaning no support or opposition stated).
Boswell votes yes, but gives a lengthy explanation as to why he supports the legislation Buford votes yes but wants a local-option amendment to be added on the floor of the Senate.Sen. Angel also votes yes, saying her 81-year-old father is a retired trainer, and she also represents the district where Churchill Downs sits. Yesterday, Angel, said she heard from many constituents by email saying the people want a floor vote on the senate.
Harris votes no, saying the Senate has already passed a bill that protects the horse racing industry through improved purses and breeders’ incentives. "I’m also concerned that the (VLT projections) just don’t work," Harris said.
"This is a tough vote," says Sen. Kerr of Lexington. "I too feel that we have proposals on the table that could help the horse industry without damaging our most vulnerable decisions." Her vote will be a "no."
Wingnut Sen. McGaha says a yes vote for the bill is a vote for suicides and employee theft. Certainly the most rational explanation I heard during the hearing.
Sen. Shaughnessy complained before his yes vote that the committee did not represent a fair hearing, in large part because the committee is stacked disproportionately with Republicans. Shaughnessy said Senate rules call for committees to be divided between Democrats and Republicans along the ratio of their seats in the Senate. Democrats have 40% of the Senate seats but half that on the A&R Committee, he said.
7:15 p.m. … Let’s cut right to it. After a computer failure at just the wrong time, I can report that the measure failed to get the committee support and will not be sent to the full Senate. Voting no were Sens. Borders, Leeper, Harris, Kelly, Kerr, McGaha, Smith, Stivers, Tapp, and Tori.. Voting yes were Boswell, Buford, Angel, Pendleton and Shaughnessy.Sen. Palmer abstained and Westwood was absent.
The room cleared quickly, many of the people from the horse industry leaving with long, sad faces. One horse owner, Jack Smith, shouted in the direction of Republican Sen. Damon Thayer, "You will never get another penny of support from me," Smith told Thayer, who is a consultant to the horse industry and a former Breeders’ Cup and Turfway Park executive. Thayer called the remark inappropriate and said he was not a member of the committee that rejected the slots bill. Thayer never came out in support of the bill, either. And for a senator who claims to be the Thoroughbred industry’s point man on Kentucky legislation, that speaks volumes.
That’s it from the live blog
Tags: A & R committee, Appropriations and Revenue Committee, Kentucky, kentucky horse industry, nick nicholson, Paulick Report, racinos, Ray Paulick, slots
Posted in Kentucky, Slot machines | 40 Comments »
Sunday, June 21st, 2009
Glencrest Farm is a family operation in the purest sense of the term. American as apple pie. Established by John Greathouse Sr. more than 50 years ago, Glencrest today is run by four sons, John, David, Allen and Edward, and the two daughters of John and Mary Allen Greathouse, Nancy and Margaret, also have played a significant part in the operation over the years. The next generation of Greathouses is preparing to carry on into the future. Click here to read a profile about Glencrest, published in the Blood-Horse and entitled "A Family Tradition."
That tradition is threatened today by a struggling Kentucky racing industry that is unable to compete on a level playing field with other states that have allowed racetracks to expand their wagering menus to include slot machines and other casino games. The breeding industry is suffering as a result. The news in the past several days that Ohio’s governor will seek to add slot machines to racetracks in the Buckeye State will only make the situation more grave.
John Greathouse Jr. has written the following open letter to David Williams, the Republican president of the Kentucky Senate who said he does not want Kentucky tracks to have Video Lottery Terminals (VLTs) or slots. A VLT bill passed the Kentucky House on Friday but Williams has said a Senate Committee will kill the bill on Monday.
Time is of the essence Please write to Williams (click here for contact information) and tell him your thoughts on the subject and include either a link to John Greathouse’s letter or cut and paste the letter along with your remarks. Also, you can click here to send an email to all Kentucky Senators. — Ray Paulick
An open letter to Senator Williams
Senator Williams
My name is John Greathouse, co-owner of Glencrest Farm, a family farm just outside of Midway, Kentucky. My brothers, David, Teddy, Allen and I own just over 800 acres where we raise cattle, tobacco, hay, corn and yes thoroughbred horses. To an outside developer this land may be worth many millions in terms of potential. To the people that work and live on the farm, it’s a way of life not commensurate with the development potential. We enjoy what we do and want to continue to do so. It’s a working farm that supported many in our family for over 50 years. We have several young Greathouses that are being trained to fill in our footsteps in the coming years. It’s also the livelihood of the thirty or so people that work there and need to keep their jobs also.
I have been a Republican all my life. I am fairly conservative and that’s the way I vote. Reagan, the Bushes, Fletcher and you have all had a chance at one time or another to help this profession. All said NO! Now my Democratic friends shake their collective heads and ask why I vote the way I do. "Vote for your pocketbook, John," they say! To this point I have stayed the course.
Senator Williams, are you familiar with Pascal’s Wager? It’s a wager with unlimited upside but no downside. That’s what we have here with the expanded gaming bill. Unlimited upside and NO DOWNSIDE. The money is currently leaving the State, so please try not to tell us people can’t afford to gamble!
Senator Williams, you should recuse yourself from these proceedings. You have been influenced by outside forces. This State stands to lo se not only its flagship industry, but its international, worldwide identity.
Do the right thing please. Kentucky needs it, the thoroughbred industry needs it, my family and our workforce need it.
John Greathouse Jr
Glencrest Farm
P.O. Box 4468
Midway, Kentucky 40347
859-233-7032
Tags: david williams, glencrest farm, John Greathouse, kentucky horse industry, kentucky slots, kentucky thoroughbred industry, Paulick Report, racinos, Ray Paulick, video lottery terminals, vlts
Posted in Kentucky, Slot machines, Thoroughbred Business | 31 Comments »
Sunday, June 21st, 2009
By Ray Paulick
Why does David Williams, the president of the Kentucky Senate, seem bent on keeping the issue of slot machines off the Senate floor? Is it possibly because the Republican from Burkesville might be criticized there for being an “anti-gambling” hypocrite who likes to play blackjack at casinos in nearby states that benefit from Kentucky’s inaction on legislation designed to bring slot machines to racetracks in the Bluegrass State.
Williams’ strong-armed strategy is to kill the House-passed VLT bill in the Senate’s Appropriations and Revenue Committee, where Republicans have a decided majority. Proponents of the bill are asking that it deserves to get an up or down vote in the full Senate. The A & R Committee is expected to meet Monday evening.
“David Williams needs to say he’s got a conflict of interest on the slots issue,” said veterinarian Arnold Pessin, a former partner in Kentucky Downs (formerly Dueling Grounds) who has been pushing for slots at Kentucky racetracks for more than decade. “Williams gambles on the riverboats in Indiana and Mississippi, which means he has a relationship with those businesses. Indiana and Mississippi casinos will be hurt if the slots bill passes in Kentucky. Who is David Williams representing on this issue? That’s what I want to know. Is he representing the people of Kentucky or the owners of those riverboats in Indiana and Mississippi? Someone needs to call him out on this.”
Pessin went on to say that Williams is not an opponent of gambling in Kentucky. “His alternate proposal would tax the lottery and increase takeout on out of state bets on Kentucky racing,” Pessin said. “If the lottery ain’t gambling, what is it? And the idea of increasing takeout on out of state bets on Kentucky racing is idiotic.”
The next step in this process is to simply ask that members of the Senate A & R Committee allow the bill to reach the Senate floor for an up and down vote. Interested parties should make phone calls or send faxes and e-mails to members of the A & R Committee. There are five Republican members of that committee that should specifically be lobbied: Ernie Harris, whose district includes Jefferson County (Louisville) , Dan Kelly, whose district includes Marion County (where there are numerous horse farms), Alice Forgy Kerr, whose district includes Fayette County, Brandon Smith, Gary Tapp , and Elizabeth Tori, whose district includes Jefferson County. Also, Independent Bob Leeper who caucuses with the Republicans also needs to hear from you. Click on their names to get contact information.
Copyright © 2009, The Paulick Report
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Tags: Appropriations and Revenue Committee, Arnold Pessin, Dan Kelly, david williams, Dueling Grounds, Elizabeth Tori, Ernie Harris, Gary Tapp, Garydon Smith, kentucky downs, kentucky senate, Paulick Report, racetrack slots, Ray Paulick, video lottery terminals
Posted in Kentucky, Slot machines | 34 Comments »
Saturday, June 20th, 2009
Whether you are for slots at racetracks or not, it is clear that the path to salvation for the racing industry will not ride on gaming alone. Long term, the industry will grow based on the ability of its leaders to think outside of the box and utilize some much-needed creativity. To that end, the executives at Churchill Downs led by CEO Bob Evans deserve a lot of credit for the overwhelming success for the implementation of Friday’s first Downs After Dark, Churchill’s new series of night racing dates throughout the summer meet.
Excitement was clearly in the air as a younger than usual crowd filled the seats at Kentucky’s most famous track. At a somewhat controversial $10 a ticket, it is clear Friday night was a revenue generator in a struggling economy, proving that racetracks can draw a crowd if the product is marketed correctly. On a night that featured no major stakes races, one long shot Derby contender in Flying Pegasus and a top purse of $57,000, the feeling was more like the Kentucky Oaks than a typical weekday of American racing.
The beer lines were long, the betting windows overpopulated and it was a struggle to walk from one end to the other. It was as if the ’50s and ’60s heyday of racing returned for one night in 2009. A crowd of 28,011 was on hand.
"We had to park and walk like it was Oaks or Derby day," said Jeff Ratanapool, a mortgage broker at Century mortgage and semi-regular at Churchill. "It’s a great way to attract fans who don’t usually come to the track"
But the buzz at Churchill was different than those mainstays of American racing. It had a feel that only comes after 8 p.m. "It’s more like nightlife, a night on the town," added Blair Isham, a veteran of the Navy Special Forces turned real estate broker for a local real estate company. He indicated he was not a regular at the track by any means, typically only coming for the Kentucky Oaks each year. "I had to see what this was like. It’s exciting."
The Paulick Report also caught up with Derby winning jockey and local celebrity Calvin Borel after an unsuccessful ride on long shot Saltgrass Trail in the eighth race, a $5,000 claimer. "I think this is awesome!" he exclaimed. "This definitely compares to Oaks as far as the crowd is concerned. "Anything to help racing and bring in the fans is a good thing for racing."
Of course, this is a different schedule for the riders and horses alike. When asked if he thought the different hours affected his preparation, Borel shrugged off the suggestion. "It doesn’t affect my preparation. The only difference is I get to sleep in till 7 instead of getting up at 5." Did he feel any fatigue or body aches from a late night at the track? A simple "no" was his response.
But again, the real story was the enthusiasm of the crowd. Heading up to the press box, Pat Day ended up on the elevator ride with a mass of pleasantly lit fans exuberant about sharing the trip with a Hall of Fame jockey. As he left the ride, the still packed transport started rocking with the chant "Pat Day! Pat Day!" People were having a fantastic time and Churchill’s signature jockey was appropriately taking in the adulation.
Is this a flash in the pan or can the brain trust at Churchill maintain the nightlife atmosphere on June 26th and July 2nd that seems to have brought many non-traditional fans? Just like the question of Calvin’s possible Saturday afternoon fatigue, only time will tell.
Copyright © 2009, The Paulick Report
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Tags: bob evans, bradford cummings, Calvin Borel, churchill downs, Downs After Dark, pat day, Paulick Report
Posted in Churchill Downs Inc., Kentucky, Marketing | 14 Comments »
Friday, June 19th, 2009
By Ray Paulick
UPDATE: Frankfort insiders say that the A & R Senate Committee will not meet until Monday and Senate President Williams will allow the bill to be heard. Interested parties will have the weekend and Monday morning to contact their Senators.
If the bill to approve video lottery terminals for Kentucky racetracks passes the state’s House of Representatives during the special session on Friday, the next battleground will likely be the Senate’s Appropriations and Revenue Committee later in the day. That’s the most likely scenario for the bill, the Paulick Report has learned from sources. Republican Senate president David Williams, an opponent of the bill, is expected to send it to the A & R Committee with the likelihood that it will be killed under the chairmanship of northeast Kentucky Republican Charlie Borders.
Interested parties are encouraged to personally attend the Senate committee meeting.
If you are unable to attend and want your opinion to be heard on the issue, call members of the committee to tell them where you stand. Click here for a list of members of the Senate A & R Committee. Once on the page, click on the names of the individual members to get contact information.
Here is the list of A & R Committee members in the Senate with their Capitol Annex phone numbers/extensions:
Charlie Borders (R): (502) 564-8100 Ext. 676 Sen. Bob Leeper (I) (vice chair):(502) 564-8100 Ext. 712
Sen. David E. Boswell (D): (502) 564-8100 Ext. 662
Sen. Tom Buford (R): (502) 564-8100 Ext. 610
Sen. Denise Harper Angel (D): (502) 564-8100 Ext. 633
Sen. Ernie Harris (R): (502) 564-8100 Ext. 605
Sen. Dan Kelly (R): (502) 564-2450
Sen. Alice Forgy Kerr (R): (502) 564-8100 Ext. 625
Sen. Vernie McGaha (R): (502) 564-8100 Ext. 656
Sen. R.J. Palmer (D): (502) 564-8100 Ext. 714
Sen. Joey Pendleton (D): (502) 564-8100 Ext. 622
Sen. Tim Shaughnessy (D): (502) 564-8100 Ext. 621
Sen. Brandon Smith (R): (502) 564-8100 Ext. 661
Sen. Robert Stivers (R): (502) 564-8100 Ext. 623
Sen. Gary Tapp (R): (502) 564-8100 Ext. 648
Sen. Elizabeth Tori (R): (502) 564-8100 Ext. 645
Sen. Jack Westwood (R): (502) 564-8100 Ext. 615
Tags: charlie borders, david williams, kentucky legislature, kentucky slots, kentucky special session, Paulick Report, racinos, Ray Paulick, vlts
Posted in Kentucky, Slot machines | 20 Comments »
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