Posts Tagged ‘Expanded Gaming’

KEEP just released an editorial in response to KY State Senator David Williams’ criticism of the Thoroughbred industry’s desire for alternative gaming in Kentucky. Are you moved by this editorial? Where do you stand on the slots issue and have any of the recent editorials changed your mind one way or the other? The Paulick Report wants to know. - Bradford Cummings

In a recent response to an editorial by Bill Farish entitled, “Gambling, Not a Partisan Issue,” Sen. David Williams continued to attack Kentucky’s horse industry in a misguided attempt to divide and conquer horsemen.
 
What Sen. Williams doesn’t understand is that his attacks only further cement the unity among our industry to seek alternative gaming at racetracks. The horse industry is more united today than at any time in our history because we understand the enormity of the threat posed to our competitiveness. We live it every day as we watch our racing dates eliminated, our purse money decline and owners and trainers ship horses to states where purses and breeder incentives are enriched by gaming revenue.  
 
Sen. Williams began his editorial by saying expanded gaming is “bad economic policy for the state and for the horse industry.”  I firmly disagree. Isn’t it bad economic policy for the state to stand by while its signature horse industry declines because we lack the competitive tools other states are using to capture what Kentucky already has? Kentucky has a horse industry that is world-renowned for its product. It generates a $4 billion economic impact. It supports 100,000 jobs statewide. But in the end, Kentucky’s bond with the horse cannot be measured by mere economics. It is that intangible that makes Kentucky unique.  
 
Let’s take Sen. Williams’ points one by one.
 
Sen. Williams says, “expanded gambling will flood Kentucky with funds that will skew our body politic.”
In his response, Sen. Williams calls into question the Farish family’s affiliations and makes mention of political corruption in other states where gaming is allowed. This personal attack on the Farish family is an all-time low point in the gaming debate and will not go unanswered.
 
The Farish family has a long history of public service and staunch support of the Republican Party.  William S. Farish served as United States Ambassador to the Court of St. James under President George W. Bush. His son, Bill, served as a personal aide to President George H.W. Bush. Both father and son are lifelong horsemen who are actively involved in all aspects of Thoroughbred racing and breeding. From their development of Lane’s End Farm into one of the world’s premier breeding operations, to their service with the American Horse Council, the Breeders’ Cup, The Jockey Club, the Kentucky Thoroughbred Association, the National Thoroughbred Racing Association and Thoroughbred Owners & Breeders, their commitment to the horse industry cannot be questioned.  
 
Sen. Williams says that once slots arrive, horse owners and trainers will get the short end of the stick.
If alternative gaming is not growing purse money at racetracks in those states where it is allowed, then why are Kentucky horsemen shipping to Pennsylvania, Indiana, West Virginia and Louisiana, among others?  
 
Total purses in Kentucky have been stagnant or have declined since 2001. In contrast, Thoroughbred and Standardbred purses in Pennsylvania jumped nearly 40 percent from 2007 to 2008, the first full year of gaming operations. Indiana’s Hoosier Park just announced its second purse increase of the current meet. Louisiana racetracks such as Evangeline Downs and Fair Grounds are enjoying resurgence. Gaming revenues are up 5.5 percent at Florida’s Gulfstream Park compared to 2008; while Calder Race Course will open its gaming operation in 2010.
 
The horse industry’s plan to authorize video lottery terminals (VLTs) at Kentucky racetracks was the most comprehensive show of support for the entire horse industry—both racing and non-racing breeds—ever to be introduced in the United States. Though purse supplements for Standardbreds, Quarter Horses and Thoroughbreds are the most visible allocation, revenue would be broadly distributed to enhance many Kentucky equine breeds and related programs.
 
Gaming funds would expand the Kentucky Breeders’ Incentive Program (KBIF), which offers economic incentives to encourage ownership of all Kentucky-bred horses, even non-racing breeds. As an example, since it’s inception in 2005 the KBIF has fueled dramatic growth in Kentucky’s Quarter Horse industry, attracting 600 new Quarter Horse stallions, more than 2,000 mares and an influx of new Quarter Horse farms.
 
Our proposal also dedicates revenue to promote the health and welfare of horses by funding new equine facilities and riding trails; it will enable improvements to the backside and stable areas at racetracks; properly fund the Kentucky Horse Racing Commission and repeal a sales tax on feed and equipment for horses—an exemption already bestowed on other Kentucky livestock.
 
Though he would like to convince you otherwise, Sen. Williams’ plan is not a “horse industry” proposal. Under it, he addresses only purse money; contributing nothing to the KBIF or non-racing breeds. His proposal would redirect to the horse industry $19 million in existing tax revenues that currently go to the General Fund, which is already suffering a shortfall. He would place a 10-cent tax on lottery tickets, so your $1 lottery ticket would cost $1.10. The Kentucky Lottery Commission estimates this tax would result in significant lost lottery sales, which would adversely affect our children since all the funds go to funding the Kentucky Educational Excellence Scholarship (KEES) program.
 
Sen. Williams says slots will not “save” Kentucky’s budget.
Kentucky’s horse industry has never made the claim that expanded gaming would be the silver bullet to Kentucky’s budget shortfall. However, what our proposal would do is generate at least $700 million in new revenue, including more than $200 million in new tax dollars for the state, and be a source of new jobs and new capital construction.
 
Sen. Williams says the horse industry is beset with problems endemic to the industry itself.
The horse industry competes with an explosion of casino gaming nationwide. Today, 36 states in the continental United States permit commercial, Indian and/or racetrack casinos.
 
Kentucky racing is battered by casino gaming forces on two fronts. First, we directly compete with six Indiana riverboats on our border, where $1.44 billion was wagered in 2008. Casinos also line Kentucky’s border with Illinois, Missouri and soon Ohio. These casinos, which include the nation’s largest riverboat, the Hollywood Casino near Lawrenceburg, are situated to take advantage of Kentucky’s major population centers.
 
Even more damaging to our competitiveness, each of the 12 racing states nearest to Kentucky—Arkansas, Illinois, Indiana, West Virginia, Louisiana, Florida, Maryland, Delaware, Pennsylvania, New Jersey, New York and Ohio—are using expanded gaming to strengthen their horse industries.  
 
We don’t view alternative gaming as a long-term fix for Kentucky’s horse industry. Instead it will provide us with a short-term infusion of revenue we can use to spark economic development in our industry. These funds will help us compete, in the immediate future, by allowing us to raise purses and preserve Kentucky’s year-round racing circuit, renovate infrastructure, explore new marketing ventures and employ new technologies in an effort to attract new fans.
 
Alternative gaming at Kentucky’s racetracks will not change the behavior of Kentuckians. They already spend more than $670 million at riverboat casinos in Illinois and Indiana alone.
 
Sen. Williams, however, continues to stir the pot by stating that Kentuckians will have to “gamble” $11 billion to produce the $1 billion net win the horse industry proposal projects. As Sen. Williams knows, this is absolutely not true. He conveniently misuses this figure to confuse and concern. In reality, “churn”—whereby players repeatedly use their winnings to continue play—will account for most of that $11 billion gross wager. We are not asking any Kentuckian to gamble a single dollar that they are not already gambling. We are, however, asking that if they choose to gamble, they do it in Kentucky to help our own people. We don’t want a government subsidy!  What we want is a level playing field. If we get this we will out-work and out-produce our competition and remain the “Horse Capital of the World”!

Earlier this week, we were the first to publish Bill Farish’s editorial on why slots were an important step in give aid to Kentucky’s horse industry. Claiming that as a Republican this shouldn’t be a partisan issue but instead a Kentucky issue, Farish took Senate President David Williams to task over his divisive tactics of pitting Republicans against Republicans.

Late last night, the Paulick Report received an email response to Farish’s editorial from Williams. While 7:45 on a Friday night is generally a slot relegated for the announcement of John Edwards’ love child, we felt it important to give both sides of this issue a proper hearing. What follows is the counter argument to the pro-slots lobby. Where do you stand? -

 

I never cease to be amazed by the manner in which slot interests and their spokesmen such as Bill Farish continue to mislead Kentuckians. The proposed expansion of gambling in Kentucky is bad economic policy for the state and for the horse industry.  Those tied to the slots may do their best to raise the specter of false divisions and false hope, but the reality of the situation is unchanged.
 
Fact #1: Expanded gambling will flood Kentucky with funds that will skew our body politic.
Bill Farish failed to mention his family’s financial affiliation with the tracks as well as to the 527 “issues” group formed by the tracks and their supporters to circumvent campaign finance laws in order to intimidate legislators to support slots.  During the recent special election, his pro-slots 527 ran negative ads that never even once mentioned slots.  State after state with gambling in the mix has been rife with stories of political corruption.
 
Fact #2: Once slots arrive, horse-owners and trainers will get the short end of the stick.
In Florida, horsemen have complained that their promised doubling of purses has never materialized.  In Ohio, under the Governor’s executive orders, owners were left to their own devices to negotiate purses with the slots people.  In West Virginia, purse money was shifted back to state government to make up for shortfalls.  And in Kentucky, have we forgotten the bitter battle waged by Churchill Downs attempting to force our horsemen to accept a smaller slice of the revenue from Internet bets?  Or the fact that Churchill Downs pays to transport horses to its own Arlington Park in Chicago in direct competition with Ellis Park?  Once slots come in the picture, players will thrill to the speed of the machine and ignore the speed of our ponies.
 
Fact #3: Slots will not “save” Kentucky’s budget.
Gambling is an unstable source of revenue.  In spite of gambling, Illinois raised taxes.  Hardly a session has passed without Indiana’s casinos and racinos asking for yet another tax break. And gambling revenues are in a decline nationwide sending governments addicted to them scurrying for additional funds.
 
Fact #4: The horse business is beset with problems endemic to the industry itself.
The horse industry acknowledges that it breeds too many horses and runs too many races in a national economy that is fragile.  Racing fans are growing older.  The industry’s weak marketing has done little to help.  Very few people these days have the discretionary cash to plunk down a cool million for a horse, or even tens of thousands of dollars.
 
During the Special Session in June, Senate Democrats and Republicans unanimously passed legislation that would have nearly doubled funding for the Kentucky Thoroughbred Development Fund and actually doubled funding for the Kentucky Breeders’ Incentive Fund without slots.  Our plan would have kept the KEES scholarship program whole and not hurt charitable gaming.  It would not have used any General Fund dollars.
 
The House plan would have forked over more than 50% of the revenue to the tracks and massively undervalued the license fees the tracks would have had to pay.  All businesses are suffering in this economy, yet the tracks insist that they and they alone deserve special treatment.
 
When the House introduced its gambling bill during the 2008 session, committee members were mysteriously replaced in order to ensure passage.  The 2009 version was heard in a committee that didn’t even allow the opposition to testify.  Finally, with the addition of over $1 billion worth of projects the bill barely passed during the Special Session. It was a far cry from the fair hearing the bill received in the Senate committee where both sides were allowed to air their views.
 
The House plan relied on Kentuckians gambling a whopping $11.9 billion – a figure that represents five times more than what is currently wagered at the tracks, at out-of-state casinos, and through charitable gaming.  Where are these players going to come from?  With gambling already in many of our sister states, slots will only cannibalize our own people — our most vulnerable sacrificed for what a horse industry insider, Ray Paulick, calls a “band-aid” solution.
 
We need to explore all the ways Kentucky horsemen can control their own future because as Churchill Downs trainer Michael Lauer recently noted, “…once the tracks get the slots, the horsemen become secondary citizens.”  I respectfully would amend that quote to include all Kentuckians.

Two months ago, the Paulick Report featured the headline REPUBLICANS VS. REPUBLICANS regarding the 527 group started by Will Farish of Lane’s End and Bill Casner of WinStar Farm. Despite both being prominent and generous donors to the Republican Party nationally and locally, they found themselves strange bedfellows with Kentucky Democrats as they helped Robin Webb squeak past Jack Ditty in a State Senate special election in late August.

What created this unusual alliance? Kentucky Republican leadership has decided to champion the anti-slots viewpoint and subsequently leave Kentucky breeders, owners and racetracks at a disadvantage to neighboring states like Indiana and West Virginia. Bill Farish, the son of Will Farish and the chairman of the Breeders’ Cup and former personal aide to George Bush Sr., makes the case that Senate Leader David Williams and others are not pitting Republicans against Democrats but instead pitting Republicans against Republicans in the ultimate display of “eating your own.”

His accurate statement that the industry has never been more united and his call for bipartisanship among Republicans, Democrats and Independents is an earnest effort toward giving the Kentucky Thoroughbred industry equal footing with those in other states.The Paulick Report hope his editorial does not fall on deaf ears. - Bradford Cummings

By Bill Farish
For almost two decades, Kentuckians have been debating the merits of expanded gaming.  As our signature racing and breeding industries have become increasingly threatened by our neighboring states, who use revenue from gaming to substantially increase race purses and breeders incentive funds, Kentucky residents have responded with a near unanimous belief that we must do everything possible to protect Kentucky’s horse industry, and the 100,000 jobs that go with it.
 
A recent statewide poll indicated that nearly 70 percent of Kentuckians support putting video lottery terminals (VLTs) at Kentucky racetracks.  That such a large majority of Kentucky residents would agree on what had been a controversial issue is striking, and speaks to our collective belief that Kentucky’s racing and breeding industries should be put on a level competitive playing field.
 
Sadly, those who oppose VLTs at racetracks, and who have clearly lost in the court of public opinion, have decided to engage in cynical rhetoric meant to divide our state instead of uniting it.
 
Senate President David Williams has made it clear that he intends to make protecting our signature industry a partisan issue.  After making a promise to every Kentuckian that the issue would receive a fair hearing in the Senate, Sen. Williams sent it to a committee where the chairman declared it dead before even hearing testimony.  Imagine going on trial and the judge declares you guilty before your lawyer even makes an opening statement.  Would you consider that a fair hearing?  
 
Now, in an effort to inject partisan politics into the discussion, Sen. Williams has attacked Gov. Beshear and other Democrats for “poisoning the well” in Frankfort.  Sen. Williams also seems to suggest that Republicans should oppose VLTs at racetracks as a tenet of our political philosophy.  As a life-long Republican, and a member of a Kentucky family that has worked on behalf of the Republican Party and Republican administrations, I can say without reservation that protecting our signature industry is not a partisan issue.  In fact, the Republican Party should be standing up for Kentucky businesses, Kentucky jobs, and a free market environment that would allow Kentuckians to fairly compete with their out of state competitors. Due to Sen. Williams’ utter mismanagement, this issue now pits Republicans against Republicans, not Republicans against Democrats, as he would have us believe.
 
Sen. Williams and several members of his caucus are currently advocating that the government should stand in the way of our signature industry, and prevent it from being able to compete.  Government interference with Kentucky businesses and job creation does not sound like a Republican philosophy I am familiar with.  But regardless, saving 100,000 jobs and the industry that identifies our state all over the world does not rest in the domain of any political party. It should be the stated goal of all Kentuckians—regardless of political registration.
 
The other strategy currently being employed is similarly distressing.  Opponents have decided that the best way to defeat VLTs at racetracks is to pit horse owners and breeders against racetracks.  By suggesting that racetracks are greedy corporations that don’t care about our horse industry, our opponents lay bare their belief that our industry must be divided in order to be defeated.  In ramping up his rhetoric, Sen. Williams has made it clear that he intends to demonize Kentucky racetracks at every turn.
 
The horse industry is as united as it has never been in the past.  Opponents of VLTs have always relied on our discord to defeat the efforts to compete on a level playing field.  Now that the industry has formed a united front, opponents seek to break us apart again.  They will be unsuccessful in their efforts to do so.  Kentucky breeders recognize that we must have a healthy horse economy in this state in order to run successful breeding operations.  A healthy horse economy includes buyers willing to invest in our product and take their investment to the racetracks in the hopes of recouping their investment. Owners recognize that they need healthy racetracks offering good purses, so that they can attempt to win back some of their initial investment.  Racetrack operators understand that they need breeders to produce and owners to race their horses at their tracks.
 
We are all in this together, and the attempt to break us into factions is disheartening.  A fractured industry cannot survive, and a failed horse industry would be catastrophic for Kentucky’s economy.  Sadly, Sen. Williams seems less concerned about helping our industry, and more concerned about maintaining control over his Senate fiefdom.   
 
However, as a new legislative session approaches, we will stand together, Republicans and Democrats, owners, trainers, breeders, racetracks, and the 100,000 Kentuckians who rely on the horse industry to make a living.  We will continue to hold our elected officials accountable, and we will not stop working until our state government gets out of the way and allows us to have the tools necessary to compete.

When horse people are told about demonstrations, they probably think about a salesman or company rep showing them how the newest product or gadget works in order for them to improve their business. But in the proud history of the United States, a different kind of demonstration has been a key part of protest movements that have brought about changes in government policy. The Boston Tea Party may have been America’s first important demonstration, and many others have followed to make this great country what it is. The issues championed by these movements have come from the grassroots as an attempt to right an historical wrong or simply as a means to be heard by those in power.
 
With this in mind, it is understandable that when an industry led by many influential and traditionally entrenched members of society have their moment in the sun to “take to the streets” — as Kentucky’s horse industry will do Wednesday morning at 10 a.m. in the Capitol Rotunda in Frankfort to rally support for expanded gaming at Kentucky racetracks — some confusion as to how to pull off an effective display may ensue.
 
But don’t worry; the Paulick Report will be your guidebook to protesting. Exhaustive research and a personal flashback to the late 1960s protests for equal rights and against the war in Vietnam have given us a list of dos and don’ts for an effective protest to get legislators to understand the importance of leveling the playing field for Kentucky’s horse industry. We aren’t guaranteeing these tips will bring expanded gaming to Kentucky, but with a little knowledge and hard work, at least Wednesday won’t go down in the annals of history with the saggy pants protest in Milwaukee, the naked cyclists against cars in the UK or anything PETA has done in the last 20 years.
 
10 Dos and Don’ts for Wednesday’s Frankfort protest rally

10. Do look presentable - This doesn’t mean you have to show up in your finest Hugo Boss suit, but make sure you at least put on a fresh shirt after cleaning up the morning stalls. And please leave your pitchfork at home. It will be confiscated at the security check.

9. Don’t confuse the cause – Wednesday isn’t your opportunity to save the whales or get tax rebates for those solar panels you installed in March.
 
8. Do call your legislator beforehand and schedule a meeting – After all, they do work for you. To find the name and number of your state representative or senator, click here.
 
7. Don’t show up at a legislator’s office unannounced – While they do work for you, they also work for the other 20,000 people in your district and so they tend to be a bit busy, especially during a controversial special session.
 
6. Do be respectful – Our friends from the Family Foundation will be on the very same steps Tuesday and some may stick around Wednesday to counter protest. No one wants to see John Greathouse slugging it out with Don Ball and his anti-gaming followers – except the Herald-Leader.
 
5. Don’t give ANYTHING to an elected official – You may think presenting David Williams with a horseshoe from your favorite broodmare is just a nice gesture, but Kentucky law strictly prohibits anything that may have the appearance of bribery.
 
4. Do tell everyone about the Paulick Report – We thought we’d try to slip a shameless plug by you! And in all seriousness, we are committed to bringing you the most up to date news on the expanded gaming issue, among others.
 
3. Don’t shoot the messenger – If you are angry at your legislator, don’t take it out on their staff. They are just doing their job and it’s a strong possibility they share a different point of view from their boss.
 
2. Do show passion – No one is going to judge you for shouting too loud or pumping your fist too fervently. Remember, you will be among friends.
 
1. Don’t give up – The worst kind of protest is one that lasts just a day. Make sure you continue to put pressure on legislators. Send them letters, set up future meetings and organize letter to the editor drives in your local papers. Trust us, they read everything written about them!

Copyright © 2009, The Paulick Report

Savvy businesses recognize value. Advertise in the Paulick Report.

Support the Paulick Report. Make a donation today.

Sign up for our Email Flashes to get the latest news, analysis and commentary from Ray Paulick