LIVE BLOGGING: KENTUCKY SENATE COMMITTEE SLOTS HEARING

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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

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  • Richard Coreno

    It has come down to the horse racing/breeding industry versus David Williams. If the brethren of Williams feel they need him to retain “their” seats and “their” political power, then the horsemen are doomed. But if the politicians have a vision to the future, they will tell Williams to take a hike, no matter how hurt his feelings will be…and with no concern of what will be his empty threats of retaliation during the next election cycle.

  • David Edmunds

    Jesus also rode a dinosaur.

  • MED

    I hope the Senators understand that this is CURRENT gambling revenue from existing Kentucky gamblers that’s draining out of the state. That makes the notion of poor, innocent Kentuckians being swept away by the evils of gambling a little more ridiculous.

  • http://cangamble.blogspot.com/ Cangamble

    Jesus also rode a dinosaur.
    *************************
    Exactly, I’d like to see Edmunds quote biologists from Harvard with respect to evolution instead.

    I guess it is OK to look to secular education when it fits your agenda.

  • bugweed

    I can assure David Williams that a “yellow dog” of any persuasion running for your seat in the next election cycle will be getting substantial donations to aid in your eventual defeat. As far as the Friend of the Family group, interesting that they would cop an old advertising slogan of the now defunct Washington Mutual Savings Bank. George Washington bred and raced horses. hated church, evangelicals and most, if not all, clergy.

    My kind of guy.

  • Mike V

    Where is there evidence of any of these evils of slot machines manifesting itself in any sort of meaningful manner in other states. You read these comments from the anti-slot people and you would think PA, NY, FL, Iowa, WVA, Indiana, Delaware and others are full of runaway crime and poverty due to slots. Where is this the case?

  • Mike V

    Wiliams’ proposal to tax out of state wagers while not taxing in-state wagerssimilarly is likely unconstitutional based upon the Interstate Commerce Clause of the US Constitution. Of course, I am sure Williams realizes it will never pass anyways so its consitutionality is irrelevant.

  • Mike V

    Lexington Senator votes No…amazing

  • ryehill

    Goodbye Alice!

  • Carrie

    Kerr is going to be out on her butt as soon as we can vote her out. How can you be the Senator from Lexington and vote NO!!! are you kidding me. These people have no idea of the collective power of thoroughbreds and horse lovers in Ky. Unreal.

  • Mike V

    she is trying to stop suicides in KY that run rampant in other slot states!! NOT!!!!

  • Mike V

    You expect a certain group to vote NO and give the usual bombastic statements about crime, suicide, etc., but one would think reasonably minded people could see through the nonsense. KY racing is in trouble. Amazing the anti-vlt people hide behind a bill that has no chance of working in practicality.

  • Mike V

    Nothing wrong with a local option vote that Buford wants.

  • Mike V

    what was the vote not to send it to the full senate?

  • E Hamelback

    To Ray: I appreciate this effort in getting the informaton out to us in this fashion.

  • Mike V

    good job Ray. The other surrounding slot states are laughing at KY right now, and the casino owners in those states are popping champagne. Amazing stuff.

  • Billy Crockett

    Now that this silliness is over, hopefully the House will follow the lead of the Senate and pass the bill to improve purses in Kentucky without giving an undeserved windfall to the already wealthy track owners.

    This bill was about track owners like the one at Kentucky Downs who bought the track less than two years ago only because they thought Kentucky would pass slots and they would make hundreds of millions of dollars selling slot gambling to people in Tennessee. They claimed they needed to operate slots 91 days for each race card they would stage.

    They tried to hijack our horse heritage to fill their own pockets.

    Now we can get back to handicapping horses instead of politicians.

  • John Berns

    Is this bill dead and if so I am starting to campian today state wide to let the true voters of the Commonwealth of Kentucky that we need some change in the state as bad as we need change in America!
    Mr. Williams must be in recieving a lot of support outside from out side the state.

  • Mike V

    The Senate bill will never become law. I believe it is unconstitutional on its face vis a vis the Federal Interstate Commerce Clause as it discriminates against out of state wagers versus in-state wagers on the same races.

  • ryehill

    Is Billy Crockett (Martin Cochran cough..cough) live blogging from the capital too?

  • http://paulick.com rr herd

    Billy Crockett. If I were the horsemenn still in KY., I would move on and close all tracks in Ky. It is the only way. Do you think I will ever bet Kentucky track with a additional tax on my wager. BS Close the tracks in Kentucky.

  • Ernie’s Ghost

    So much for letting the people decide, eh Governor Beshear? By tying all to purses this bill was doomed.

  • http://thehorseyset.net RhondaL

    Thank you for the live coverage, Ray. I’m pretty bummed. I know what Maryland’s dithering over slots did to a friend’s small breeding farm. She can’t sell her Maryland-breds.

    Looks to me like the Bible Belt tightened its stranglehold on Kentucky again. Just in time, too, for the Wold Equestrian Games to come to Kentucky.

    Those of you with other ideas of how to save the horse industry? Now’s your time to step up. I really, truly hope your alternate plans work. I really do. Because, right now, you’re all we’ve got.

  • ryehill

    Link to Mr. Thayer’s facebook page. You can let him know how you feel in a respectful way by sending him a message or writing on his wall..
    http://www.facebook.com/profile.php?id=1413193839&ref=ts

  • Priscilla Peabody

    What do you expect from a state that still doesn’t sell liquor on Sunday. Backward.

  • Ted Sed

    This bill was horribly managed by the Governor.

  • Gary

    Kentucky – Unbridled Idiocy, self-interest, backwardness, foolishness……

  • john g sikura

    This issue comes down to electing those that sympathize with our plight and have the courage to vote yes when important equine issues arrive on the floor. It is now a matter of record where people stand and it is incumbent upon us to support and friends and defeat others. The first place to start is Lexington where we should have the most strength but got a NO vote. Others such as Don Ball need to be OUTED publicly as they oppose the issue and have great influence within their party but work quietly behind the scenes to defeat the issue.Everyone is entitled to their point of view but we need to publicize where they stand. On a final note the ‘horse senator’ Damon Thayer’ was spared being assigned to the committee that voted on the bill. Clearly his party did not want to put him in a vulnerable position to have to vote on the issue. This did not relieve him of that responsibiltiy for me although i understand his defense will be that he never had the chance to vote the issue. One regret that i do have is that no testimony revealed the weakness of the Williams plan. It would not have changed the vote but it should have been discredited in front of the committee. The No votes now have this to fall back on as an alternative that was rejected without a rebuttal of why it did not work. It is now time to close Ellis and Turfway and give clear evidence of the consequences of the NO vote. I will continue to expand the Canadian aspect of my business and reduce my activities in Ky. I feel like i am living my life in reverse. I moved her 25 years ago from Canada and now shift my business from where i came. John G. Sikura

  • Jon Paul

    I was on a smoke break at an early Bingo game when I looked at the Blackberry and the news said it failed. We don’t need that kind of Las Vegas gambin in rural Kentucky. Thanks Sen Williams.

  • Don Reed

    Went to Delaware Park this weekend, for the first time; what an amazing contrast to the doomed slums that are the non-racino tracks.

    The economic wave of the future could not have been more obvious.

    Way to go, Kentucky, New York, et al.

    You’re finished. Done for. Goners.

  • John Mechelke

    John Sikura
    Why would you race here when Canadian purses are way better? You are wasting your time at the Kentucky tracks,which have turned into “Dog Tracks”in my opinion.
    You probably won’t get mugged outside of Woodbine.Odds are you would at Churchill.Good luck up north,and save a seat for me at the Woodbine simulcast facility.

  • http://rosehill-farm.com Tony Ocampo

    It is pretty obvious that tonights vote went according to party afiliation. regardless of which district you represented. It did not matter if you represented a Central Kentucky district with strong Horse Support or somwhere else. Demorats were for it and Republicans against it.

    As a life long horseman and Republican, my buck to the Republican Party STOPS HERE !!
    It is imperative that we as a whole forget which party we belong to and vote for who best represents our interests. Fayette County voters need to oust Kerr. There should be no room for her in Fayette County. As far as Williams we (Fayette County) cannot vote him out, but we could $urely $upport who ever runs against him next election. (If we are still in business !!).

    Senator Kerr should visit Hill ‘n’ Dale Farm and see what this Great Commonwealth risks to loose.

  • wesly

    Dont forget….

  • bugweed

    THANK YOU SENATORS, YOU HAVE MADE OUR INVESTMENT IN PENNSYLVANIA, SAFE AND ABOVE ALL, SOUND! Kentucky, the Horse’s Ass Capital of the World.

  • kyblue

    King Williams was spot on when he told us all to stick a fork in it. The wise ones have spoken and they’ve basically said they don’t care about horse racing in Kentucky. Senators, you reap what you sow and before long, horse racing will no longer care about Kentucky. I can’t wait for the mid-term elections… To be continued.

  • http://www.tahomastud.com Kate Lantaff

    Unbelievable idiocy. I feel like our multi-million dollar investment over the last 5 years has been flushed down the proverbial toilet. A fellow industry member suggested a bumper sticker the other day which should be displayed by all of us who raise horses in the Bluegrass. “Kentucky–where ignorance meets bliss.”

  • Disappoint Ted

    How does the “Honorable”Mr Thayer look into a mirror each day???

  • john greathouse

    8,9 and 10
    actually we have had a chance to vote her and others out before..let’s get it DONE the next time! I am pretty amazed at how stupid these people are but after looking at Washington…why should I be surprised

  • Billy Crockett

    This is an open letter to all horsemen in Kentucky…not track owners who claim to speak for you while promoting their own interest over yours.

    1) When this comes up again…and it will…you must lead. You should never have allowed track executives to be the go-to spokesmen for this. Their interest is not the same a yours. When was the last time a track did anything more for horsemen that the bare minimum they had to concede in negotiations? Have they been on your side in simulcast and on-line wagering revenue split disagreements?

    2) With one exception, every time this has passed it has been about maximizing revenue to the state. Why would you let the bill you support maximize revenue to track owners instead of the politicians you were asking to approve it? More than 60 percent of the revenue would have gone to the track owners and 25 percent to the state. It should have been the other way around…the dollars would have been much more compelling to Republicans looking to avoid tax increases.

    The only exception to this was Oklahoma where slots at the tracks was a throw-in as part of a bill to legalize Indian casinos.

    3) Churchill Downs and Keeneland are the flagships of horse racing in Kentucky. With all due respect, Ellis Park, Turfway and Kentucky Downs are insignificant and have no influence on the public or politicians. You should focus on expanding and improving Churchill and Keeneland and ignore the other three if they are still around.

    There is no reason Keeneland cannot run in March and September and there is no reason Churchill cannot expand it’s schedule.

    4) Tying your future to the Democrats is a dead-end. Thanks to Obama’s bailouts, deficits and limp-wristed approach to terror, folks in Kentucky are going to come out of the hills to vote against Democrats for the next several election cycles. When this passes, the majority of your votes may come from Democrats but the votes that put you over the top will come from Republicans.

    Grandstanding comments right now about voting out Republicans will hurt you in the future since politicians are Republicans and Democrats first and their own power depends on their own party being elected.

    5) Your efforts next time should focus on a referendum. This is different than a constitutional amendment. Ask the legislature to approve the bill contingent on a statewide vote. This strategy will give opponents an excuse to vote yes since they are deferring to the people’s will.

    In conclusion, you are a lot closer than you think. However, you – the horsemen – are the ones who have to lead. Keep a healthy distance from the track owners. They are only on your side because they need you to get their payday. Their livelihood is not dependent on slots…yours is.

  • http://none Garrett Redmond

    Am I the only person who finds this entire issue amusing?

    Racetracks that don’t know how to stage live racing show us they don’t know how to get a bunch of political hacks to give them what they believe will be their key to Fort Knox.

    It takes on a partisan color with Republicans automatically being assigned the role of being against, while Democrats assume the mantle of messiah of the horse business. I’m a registered Republican, but that has nothing whatever to do with my belief slot machines are not going to save the Thoroughbred business – anywhere!

    Then someone introduces Christianity to the fray while ignoring the fact it is Muslims who are spending all the money on horses in Kentucky.

    Blaise Pascal is quoted in an attempt to encourage a YES vote. But Pascal was an uncertain agnostic and not sure of anything. Moreover, he was FRENCH! Could that be good for Kentucky? Well, we do have Paris.

    John Sikura is concerned with possible return to Canada, while Carrie Brogden pines for Virginia. So if our legislators will not make track operators rich, why not return to the breeding places of greats like Northern Dancer and Secretariat? Is Kentucky grass that much greener? Sorry, bluer?

    Then Mrs. Banks regales the legislators with all the black type she has in her family. Presumably thinking that entitles her to a type of bailout, just in case the Eastern Kentucky oilwells run dry.

    Damon Thayer illustrates what a ‘weak sister’ he is, but surely we all knew that when his idea to drop the sales tax on stud fees was morphed into the Breeders’ Incentive Plan , where people who don’t need it draw millions, e.g. the Barbaro Jacksons.

    There are many more funny cameos in the subject, but , not to flog a dead horse!

    Silliest decision I ever made was getting into the Thoroughbred business. However, I plead that as I was thirteen, I was young and foolish .

    Smartest decision I ever made is to get out of the Thoroughbred business. Of course, I’m a little older now and I’m a little wiser.

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